Economics Questions

Re: What Austrian Economics "is" and "is not". An article by Steven Horwitz, curious on the response.

EconomistInTraining — Wed, 01 Dec 2010 17:54:00 GMT

Oh, really? Could you please show me the author and his paper who participates at the CP-blog who used 'econometrics' (as a tool to predict the future and/or to deduce theory)? I'm also not sure what you mean by being 'receptive to math'. Could you give an example of what you mean by that?

Off the top of my head only Roger Koppl comes to mind, perhaps there's other that I'm missing, but he certainly makes use of econometric tools in his book on Big Players. Besides that George Selgin is quite open to mathematical modelling and has used it in papers and Barkley Rosser's work is mathematical even by the standards of mainstream economics.

All three comment regularly on the CP blog.

This is not true. Their 'empirical work' is completely and utterly consistent with the Misesian framework and his careful laid out difference between 'theory' and 'history' - as, amongst others, put forth in 'theory and history'. Again: Mises - nor Rothbard - was against 'empirical research'. We just have to realize the epistemological difference between constructing theory and analyzing empirical stuf/history.

Of course, I agree with this, what I was actually trying to say was something more along the lines of :

Something else I would like to note is that a lot of the work that (some) people at the CP-blog do is the fact that they apply austrian insights to analyze the real world, while (a lot) of the Mises institute focusses on establishing pure theory. (Obviously, imo, we need both.) If you look at the work of Leeson (development/pirates), Boettke (real existing socialism) and Coyne (nation-building) it all has one thing in comment: people trying to achieve ends by using means in suboptimal and real existing institutional constraints.

Which puts it very nicely.

Re: What Austrian Economics "is" and "is not". An article by Steven Horwitz, curious on the response.

Caley McKibbin — Wed, 01 Dec 2010 05:56:54 GMT

Horwitz disagrees with Rothbard about on some matters of money, banking, and business cycles, but Rothbard is certainly among Horwitz's major intellectual influences.

That is a typically ambiguous description of the connection between this group and AE economists. I'm not sure in concrete terms what is the exclusive common ground.

Re: What Austrian Economics "is" and "is not". An article by Steven Horwitz, curious on the response.

Modus Tollens — Wed, 01 Dec 2010 03:50:51 GMT

Boettke and Horwitz are big fans of Rothbard.

Horwitz disagrees with Rothbard about on some matters of money, banking, and business cycles, but Rothbard is certainly among Horwitz's major intellectual influences. Boettke seems to agree with Rothbard more often than Horwitz, and assigns Man, Economy and State to his students. Both generally have very nice things to say about Rothbard. I am not sure about Leeson, Sautet, or Prychitko.

The regular commenters usually are less fond of Rothbard, like myself, but the main bloggers are big fans.

Re: What Austrian Economics "is" and "is not". An article by Steven Horwitz, curious on the response.

BlackNumero — Wed, 01 Dec 2010 02:53:08 GMT

Thanks guys. Someone mentioned earlier that they don't like Rothbard, is there any truth to this?

Re: What Austrian Economics "is" and "is not". An article by Steven Horwitz, curious on the response.

Caley McKibbin — Wed, 01 Dec 2010 02:09:55 GMT

Can anyone fill me in on the Coordination Problem and its problems with the MI?

They are the types that try to gain ground as improved professional Neo-classical/Keynesian economists by incorporating some Austrian-Lite. LvMI doesn't advocate bank bailouts/QE/whatever-you-want-to-call-it as Keynesians do; it doesn't incorporate what Neo-classicals believe is useful research. In other words, they have a doctrine of synthesis of every school, whereas LvMI is hard-pressed to buy into other schools.

Re: What Austrian Economics "is" and "is not". An article by Steven Horwitz, curious on the response.

AdrianHealey — Tue, 30 Nov 2010 21:45:37 GMT

DD5:
How do you distinguish between open minded and inconsistent? Being all over the place can make belong to the latter you know.

I would argue that EIT his assessment is wrong on this one. Their empirical work is, as far as I can see, in line of the (correct) Misesian methodological framework.

As someone who specifically studies methodology, I can't find that many epistemological mistakes from the work of Leeson/Boettke/Coyne. (I can't speak onthe work of MI of Horwitz and White.)

Re: What Austrian Economics "is" and "is not". An article by Steven Horwitz, curious on the response.

AdrianHealey — Tue, 30 Nov 2010 21:43:07 GMT

EconomistInTraining:

On a scholarly level, there are differences in terms of methodology and points of emphasis. CP guys tend to be a little more open minded about methodology and focus more on the interaction between theory and history than a priorism as a lot of MI guys define it.

This is not true. Their 'empirical work' is completely and utterly consistent with the Misesian framework and his careful laid out difference between 'theory' and 'history' - as, amongst others, put forth in 'theory and history'. Again: Mises - nor Rothbard - was against 'empirical research'. We just have to realize the epistemological difference between constructing theory and analyzing empirical stuf/history.

EconomistInTraining:
Some of them are more receptive towards math (some use game theoretic arguments, others use econometrics etc.) although, they're by no means homogeneous in this regard.

Oh, really? Could you please show me the author and his paper who participates at the CP-blog who used 'econometrics' (as a tool to predict the future and/or to deduce theory)? I'm also not sure what you mean by being 'receptive to math'. Could you give an example of what you mean by that?

I, more or less, agree with your other notes.

Something else I would like to note is that a lot of the work that (some) people at the CP-blog do is the fact that they apply austrian insights to analyze the real world, while (a lot) of the Mises institute focusses on establishing pure theory. (Obviously, imo, we need both.) If you look at the work of Leeson (development/pirates), Boettke (real existing socialism) and Coyne (nation-building) it all has one thing in comment: people trying to achieve ends by using means in suboptimal and real existing institutional constraints.

Re: What Austrian Economics "is" and "is not". An article by Steven Horwitz, curious on the response.

DD5 — Tue, 30 Nov 2010 21:20:26 GMT

EconomistInTraining:
CP guys tend to be a little more open minded about methodology

How do you distinguish between open minded and inconsistent? Being all over the place can make you belong to the latter you know.

EconomistInTraining:
and focus more on the interaction between theory and history than a priorism as a lot of MI guys define it

I would argue it's completely the other way around. Now, if you are talking about building economic theory on the basis of [subjective] historical accounts and empirical data, then I would agree with you. But this goes back to the first remark about whether they are open minded or inconsistent.

Re: What Austrian Economics "is" and "is not". An article by Steven Horwitz, curious on the response.

EconomistInTraining — Tue, 30 Nov 2010 20:49:03 GMT

Can anyone fill me in on the Coordination Problem and its problems with the MI? Thanks.

On a scholarly level, there are differences in terms of methodology and points of emphasis. CP guys tend to be a little more open minded about methodology and focus more on the interaction between theory and history than a priorism as a lot of MI guys define it. Some of them are more receptive towards math (some use game theoretic arguments, others use econometrics etc.) although, they're by no means homogeneous in this regard. The former also tend to view Hayek and Mises as complementary goods rather than substitutes, where Hayek's arguments about knowledge are something of a fleshing out of Mises' calculation argument. Whereas MI economists (and there's a lot of variation in this over at the MI) tend to see the two as substitutes with Mises' argument being superior. Other differences include opinions on business cycle research, hermeneutics (not a big issue at CP anymore) and a focus on institutions and uncertainty (which I would say are more stressed at GMU/ CP).

On a political level, anarchists are well represented in the CP camp, but probably less so than over here at Mises and they tend to be of a more cosmopolitan variety than MI which I'd say is pretty conservative (although, guys like Roderick Long are hardly conservative, but he's also associated with Cato/ CP/ GMU guys).

In terms of their mission, CP are all for public policy education and laud the MI's efforts to this extent. But generally believe that economists should be scholars as opposed to laymen, whereas MI is a little more populist in their efforts and believe anybody can make contributions. Hence the emphasis that GMU economists put on interacting with other groups of economists (primarily institutional economists, public choice economists, post keynesian economists I'd say) alongside publishing in mainstream journals and getting positions at non-Austrian institutes (both of which I'd say they do a pretty poor job of doing, but hey, that's besides the point).

In personal terms there's just a lot of bad blood because of historical reasons I'd say. There's probably truth in both accounts, insults have certainly flown both ways and both camps try to act morally superior to the other in some regard. The reality is that it's just a lot of bullshit, the nastiness is the cause of a minority of internet trolls who can like to cause problems.

Re: What Austrian Economics "is" and "is not". An article by Steven Horwitz, curious on the response.

BlackNumero — Tue, 30 Nov 2010 20:23:47 GMT

And what about Rothbard? They don't like him? I've seen Peter Boetekke write favorably of MES on his blog.

Re: What Austrian Economics "is" and "is not". An article by Steven Horwitz, curious on the response.

DD5 — Tue, 30 Nov 2010 20:13:25 GMT

BlackNumero:
Can anyone fill me in on the Coordination Problem and its problems with the MI? Thanks

One word. Rothbard.

Re: What Austrian Economics "is" and "is not". An article by Steven Horwitz, curious on the response.

BlackNumero — Tue, 30 Nov 2010 19:38:42 GMT

Can anyone fill me in on the Coordination Problem and its problems with the MI? Thanks.

Re: What Austrian Economics "is" and "is not". An article by Steven Horwitz, curious on the response.

Lewis S. — Tue, 30 Nov 2010 00:00:03 GMT

Can you back this statement up? Because otherwise I call BS.

Perhaps principles texts can blur the distinction, but this is to be expected.

Then let me rephrase so as to not overstate my case - college intro principles books. Just pulled mine off the shelf (Case & Fair) and flipped to an entire macro section on stabilization policy, the unstated assumption being that it is role the of government to stabilize the economy and what options they have available. I taught high school econ for five years and the text we used has similar chapters.

This is where most people who have had some economics (high school and maybe some intro college courses) are getting their understanding of what the discipline is (that and the media). Even if the texts themselves fail to support what I've said, I think my point still stands.

Re: What Austrian Economics "is" and "is not". An article by Steven Horwitz, curious on the response.

EconomistInTraining — Mon, 29 Nov 2010 23:51:04 GMT

I had a rather difficult time trying to explain that Austrian economics is value free, and I think John Voight hit upon an important point with respect to neoclassical texts - they do blur the line between normative and positive economics, so much so that many intelligent people think economics is, at its core, the generation of policy initiatives gleened from equations and curves, and they have a hard time seeing otherwise.

Can you back this statement up? Because otherwise I call BS.

Perhaps principles texts can blur the distinction, but this is to be expected.

Re: What Austrian Economics "is" and "is not". An article by Steven Horwitz, curious on the response.

Lewis S. — Mon, 29 Nov 2010 23:47:53 GMT

A few random thoughts after reading through the comments:

It gets me to thinking about a conversation I recently had with someone who specifically noted the lack of policy implementations stemming from Austrian economics and thus declared the framework to be useless. I had a rather difficult time trying to explain that Austrian economics is value free, and I think John Voight hit upon an important point with respect to neoclassical texts - they do blur the line between normative and positive economics, so much so that many intelligent people think economics is, at its core, the generation of policy initiatives gleened from equations and curves, and they have a hard time seeing otherwise.

So these folks then point to the "Austrian" track record of successful policy proposals and see no such statements as "Austrian economics says the government should do X, Y, or Z. But, of course, any policy implications stemming from an Austrian framework are directly detrimental to the political class, and so rarely get considered in the public realm except as the rantings of ideologues, making it more difficult for Austrianism to crack the mainstream.

From this perspective, it makes me more sympathetic to the work and perspective of the LvMI and makes me think the original poster's objective may be more of an uphill struggle than he believes. Getting economics professors to embrace Austrianism and its methodology is one thing, but it seems to me that doesn't necessarily translate into politicians accepting it when the vast majority of ignorant Americans are the ones going to the polls. Like it or not, the general public must, in some way it seems, be given a healthy dose of Austrianism to somehow combat this circumstance.

These are just my initial thoughts as a layman.