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Re: Answering Zarlenga's criticism of teh Austrian School

Kaz — Tue, 04 Jan 2011 00:03:05 GMT

I would answer, but I started looking at the background of your icon and don't remember anything that happened in the previous 24 hours, which includes your question.

Re: Answering Zarlenga's criticism of teh Austrian School

liberty student — Mon, 03 Jan 2011 20:30:11 GMT

What is it with you guys bumping year old threads today?

Re: Answering Zarlenga's criticism of teh Austrian School

Kaz — Mon, 03 Jan 2011 20:23:48 GMT

Clearly, the man has never read an Austrian text in his life. No clear definition of money? If Austrians have a strong point in anything, its in money.

Actually, I'm not certain I disagree with him on that isolated point...I just don't see that it's bad.

Mises, Hayek, Schumpeter, et allum seem to have a very abstract idea about what money really is, and that's good.

Only Rothbard, and Rothbard's mischaracterization of Mises, seem to me to claim a strong, clear absolute for money, how it should be used, et cetera.

The good Austrian position is that it's simply a class of tool used for transactions and accounting, and that the free market can determine what version of it works best, and when. Very abstract and vague, which is good.

Rothbard does go far beyond that, insisting that money must be a proxy for barter of a commodity, has no intrinsic value of its own, et cetera. But he's not really Austrian.

Re: Answering Zarlenga's criticism of teh Austrian School

hugolp — Mon, 18 Jan 2010 14:12:02 GMT

vindician:

It may very well turn out to be a waste of time in the sense that Zarlenga is hardly going to change his views or even respond to the criticism. But doing this will certainly bolster my own understanding of AE and is good practice for future debates.

Also, maybe we could get Ron Paul to talk to Dennis Kucinich and persuade him to cut his ties to Zarlenga and the AMI cranks :)

I think it would be more productive to get Ron Paul to put wings on a caw and make it fly.

Re: Answering Zarlenga's criticism of teh Austrian School

vindician — Mon, 18 Jan 2010 12:29:47 GMT

It may very well turn out to be a waste of time in the sense that Zarlenga is hardly going to change his views or even respond to the criticism. But doing this will certainly bolster my own understanding of AE and is good practice for future debates.

Also, maybe we could get Ron Paul to talk to Dennis Kucinich and persuade him to cut his ties to Zarlenga and the AMI cranks :)

Re: Answering Zarlenga's criticism of teh Austrian School

zefreak — Mon, 18 Jan 2010 12:04:13 GMT

From what I read, you seem to offer substantive critiques of his position, although many Austrians wouldn't agree with your equivocating free banking with 100% reserves or a gold standard.

I wonder if it was really worth the effort though..

Re: Answering Zarlenga's criticism of teh Austrian School

vindician — Mon, 18 Jan 2010 11:51:34 GMT

Thank you! This was exactly what I was looking for!

And you're right, he really doesn't know anything about Austrian economics (or economics in general, as it seems), but then again there are depressingly few who do.

Thank you very much for your help!

Re: Answering Zarlenga's criticism of teh Austrian School

Esuric — Mon, 18 Jan 2010 10:40:28 GMT

vindician:

Knut Wicksell; Interest And Prices; English translation by R.F. Kahn, 1936; A. M. Kelley reprint, 1962; page xxvi. This carefully controlled "grooming" of the thoughts of Austrian economists in America would be de-railed if those economists were to really understand Aristotle's monetary views. Some Austrian economists would like to claim Wicksell as one of their own, but these ideas are very foreign to the Austrian's view of money.

He completely exposes himself right here. He was taught that Wicksell held onto an endogenous view of money while Austrians hold onto some version of the quantity theory. This is because he doesn't understand the true definition of "endogenous money." Money is said to be endogenous when prices, interest, and output affect the supply of money, and not the other way around. Wicksell claims that the natural rate of interest (which comes directly from Bohm-Bawerk's capital theory) is in continuous flux due changes in the real economy, and that the market rate of interest fluctuates around the nayural rate via market forces. The market rate, then, is controlled by the banking system as a whole (as opposed to individual banks) while the natural rate is an entirely independent economic phenomenon. For Wicksell, a boom is caused by some interventionist entity which interferes in the money market and suppresses the market rate below the natural rate for an extended period of time. What Wicksell did, and this is his major contribution, is show that increasing the supply of money does not increase prices directly, but does so only through an intermediary--the market rate of interest (when suppressed below the natural rate which is a real and independent economic phenomenon).

Mises and Hayek built upon Wicksell's framework (which, again, stems from Bohm-Bawerk, an early Austrian economist) and turned it into the ABCT. Indeed, the ABCT is merely the synthesis between Austrian monetary and capital theory. If we hold onto this meaningless definition, then one could say that Austrians hold onto an endogenous view because money is created by the banking system. But again, this is pure obfuscation: money is exogenous if the supply of money affects the market rate of interest, prices, and nominal output (which is Mises and Hayek's position). I don't want to read anymore because this guy doesn't know what he's talking about.

Your responses, those which I've read, look pretty good.

Re: Answering Zarlenga's criticism of teh Austrian School

vindician — Mon, 18 Jan 2010 10:23:23 GMT

I haven't expressed any disappointment, I have only asked for help. If people don't have time or don't think its worth it, then that's completely okay and understandable. I was just surprised at you because it seems you think it would have been better if I hadn't raised the issue at all. Like I said, if you don't think there is any point in answering Zarlenga then that is completely fine, but this whole discussion has been completely derailed.

If you want to help me, I can only ask that you read some of the comments I've made in response to Zarlenga's claims. You don't have to read everything of course, but I would appreciate if you could look through one or two passages and let me know if I've misstated or left something out. Zarlenga's text is in plain, my comments are in bold italic.

That would further my understanding of economics a lot more than the discussion whether or not Zarlenga is worthy of a reply or not :)

Re: Answering Zarlenga's criticism of teh Austrian School

liberty student — Mon, 18 Jan 2010 08:44:52 GMT

vindician:
Knowing my own limitations, I came here to get help from other Austrians. Evidently, that was a mistake on my part.

I think people here would be happy to help you learn AE so you can challenge his ideas if that is how you want to spend your time, but being disappointed that a bunch of students and laymen on the forum aren't going to take on your mission seems like maybe your expectations were too high going in.

vindician:
What amazes me is the hostile attitude against someone who asks for help in answering a critic of the Austrian School who by no means is such a fringeish crank as he is made out to be.

What hostility? I'm offering to help you where we have a mutual interest. The learning and understanding of economics.

Re: Answering Zarlenga's criticism of teh Austrian School

vindician — Mon, 18 Jan 2010 08:37:43 GMT

I deleted it because the text file didn't work.That is why the simplest solution was to copypaste it all into the first post. An admin might want to look into that. It doesn't take much for a pdf-file or any file for that matter to exceed the 64Kb limit.

Anyways, I think that someone who's running a think tank and promoting legislation through Congress is much more serious than a media clown like Krugman, whom even mainstream economists must consider to be a joke these days, at least when he talks about the current crisis.

I wanted to construct a thorough response to some of the most outrageous claims Zarlenga made. Knowing my own limitations, I came here to get help from other Austrians. Evidently, that was a mistake on my part.

The attacks on Ron Paul built him up because they were, in most cases, ignorant and ad hominem, which is not what I'm looking to do. Again, that's why I came here. I also like to think that it was Ron Paul himself and his ideas that made him popular, not the personal attacks against him. What amazes me is the hostile attitude against someone who asks for help in answering a critic of the Austrian School who by no means is such a fringeish crank as he is made out to be. After all, his monetary reform could very well find support in the Congress.

Re: Answering Zarlenga's criticism of teh Austrian School

liberty student — Mon, 18 Jan 2010 00:38:19 GMT

vindician:
My fascination stems from the fact that here is a person about whom there is not a single article on the entire mises.org, despite the fact that he's been very critical of the Austrian School and obviously on false grounds.

Because there is little profit in answering cranks. Just as there is little profit in confronting every crank here. I am amazed that you made a thread, deleted it, then made it again with all of the text in (which 99.9% of readers won't bother to go all the way through). Zarlenga was addressed in a 1984 journal here iirc, but other than that, he's simply not important enough, at a time when people want to learn more about AE, to worry about refuting as a critic.

If you don't know much about economics, I suggest you join us in learning. Focusing on particular personalities isn't conducive (in my opinion) to being well rounded intellectually. It's the ideas which matter.

vindician:
After all, there is no shortage of articles responding to other cranks (like the clown Krugman), so why is this one left unscathed?

I imagine most people don't even know who Zarlenga is, until you brought him up. Krugman is a public intellectual and something of a media personality. In a way, you're doing more to promote Zarlenga than he is doing himself, because frankly, I don't think many people are aware of him, or his views.

You might want to consider that your attempts to attack him, simply build him up, the same way that attacking Ron Paul made him a sympathetic figure and kick started his campaign. If they had been smart enough to ignore him, he would have faded away.

Re: Answering Zarlenga's criticism of teh Austrian School

vindician — Mon, 18 Jan 2010 00:25:03 GMT

I can't remember claiming to know very much about economics. To the contrary, I've stated that I am a mere student of the Austrian School, hence I'm asking for for feedback on the comments I've made to Zarlenga's text.

My fascination stems from the fact that here is a person about whom there is not a single article on the entire mises.org, despite the fact that he's been very critical of the Austrian School and obviously on false grounds. It surprised me that no one had taken time to even comment the things he's said. After all, there is no shortage of articles responding to other cranks (like the clown Krugman), so why is this one left unscathed?

But however crankish Zarlenga is, I don't think we can or should ignore him. He is the head of the American Monetary Institute, the self proclaimed leading think tank on monetary theory and history in the US. They are currently supporting a bill put forth by Rep. Dennis Kucinich, calling for the monetary reform advocated in the book, i.e. the 100 persent reserve solution. This at the same time Ron Paul is putting forth proposals to allow competing currencies.

I think we should take the ideological battle wherever it goes, especially when someone is spreading lies about the Austrian School and putting forth proposals in the US Congress which would bring back the age of the Greenbacks. As said my goal is to write an article or even several articles criticizing Zarlenga, but I will need some help with that. It is that help I'm asking for on this thread.

Re: Answering Zarlenga's criticism of teh Austrian School

Beefheart — Sun, 17 Jan 2010 23:55:04 GMT

Clearly, the man has never read an Austrian text in his life. No clear definition of money? If Austrians have a strong point in anything, its in money.

Re: Answering Zarlenga's criticism of teh Austrian School

liberty student — Sun, 17 Jan 2010 23:54:21 GMT

Why your fascination about this? You don't post about anything else about this guy. And you claim to now know very much about economics.