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?
Scineram: So if a woman goes on a shopping spree in a mall bankrupting herself, we know it is a rational voluntary choice instead of a biological reaction to stimuli, because...?
So if a woman goes on a shopping spree in a mall bankrupting herself, we know it is a rational voluntary choice instead of a biological reaction to stimuli, because...?
It may be of interest to note that Rothbard predicated praxeology on free will. FYI I'm with him on that.
Irrespective of that a lot of so called reflexive actions are actually as a form of rational habitution. The other examples are merely frivolous. In any case you can choose to sneeze, ever tried to hold it in- it is possible. EVen if you sneezed and you did't want to all it would show was that you didn't have sufficient measn to achieve your ends which is catergorically the same as wanting to jump off a bridge and fly and realise your arms don't give you much lift.
The atoms tell the atoms so, for I never was or will but atoms forevermore be.
Yours sincerely,
Physiocrat
Jonathan:
I think we're all clear that no purposeful human action can be regarded as irrational, but scineram's question is more along the lines of how can we determine whether something is purposeful or merely a biological reaction. As an observer, you may notice someone moving their leg, and if you know that it was purposeful, then you know the person considered that action to yield them the highest utility ex ante, but the problem is that you really have no way of knowing if it was purposeful or whether the nerve under his knee cap randomly fired. In scineram's example, there's no way of knowing to what extent the self-bankrupting woman's shopping spree consisted of purposeful action or merely biological reflex. Yes, there are biological factors than can impact a person's purposeful decision-making, but I'm more so talking about that which completely bypasses the decision-making portion of a human's brain.
Alex M,
Mises differentiates from the two. Subconcious behavior is a response to a stimulus, and not designed as a means to accomplish some end. Rational behavior, or human action, is meant as a means to accomplish an end.
In scineram's example, there's no way of knowing to what extent the self-bankrupting woman's shopping spree consisted of purposeful action or merely biological reflex.
Why not ask her? Many murderers have biological problems, as well, yet their actions are purposeful in the sense that they are made through a decision. I find it hard to believe that we're discussing whether or not it's possible to know if a woman purposefully bankrupted herself shopping, as if we've never gone bankrupt ourselves (whether as college students, or as teenagers, or as adults).
Yes, subconscious behavior is not purposeful and is not intended to accomplish an end, but if it's possible that subconscious behavior can radically affect the market, it's an important thing for an economist to consider. Since Austrian theory focuses only on the action that is purposeful, with no inquiry into the non-purposeful reflexes that may impact the market, I am hereby inspired to write a 900 page treatise called Human Reflex.
Alex,
While I cannot personally praxeologically provide the logic to prove to you how markets are formed by cooperating rational actors, I invite you to read (or re-read) the first two hundred pages of Human Action. But, if we accept the axiom of human action (whether we believe that this axiom was developed a priori or empirically), or that humans act purposefully towards some end, then we should also agree that given this rationality humans will also coordinate in order to reach their own ends. Coordination and exchange is but a means towards some personal end. I'm not sure you could build a market in the same way through impulses - this is how Mises differentiates human society from animalistic society, which is built largely on impulses and instinct.
In regards to the example of the shopping woman, the fact is that she is making decisions. These decisions can be influenced by biological factors inherent in her genotipical makeup, or due to psychological factors (also influenced by genotype), but her actions would still be purposeful and made conciously. She doesn't shop herself into bankruptcy because she has to, but because she wants to, even if after the deed is done she no longer believes that was the best choice (the concept of uncertainty).
I'm not sure it's useful to simply assume that humans act irrationally and set up some type of bad example in order to spread some doubt. You'll have to show, through logic, that markets are built through impulses. Before you do that, however, I suggest you read Israel Kirzner's The Economic Point of View. Not only does his cover praxeology and rational thought, but the volume includes a debate between him and Gary S. Becker.
"What are you trying to say?" - yessir
I am saying that comparing Austrian economics, and the potential falsification of it, to falsifying a proven geometric formula is dumb.
It's hard to answer this question because there is torrential empirical evidence supporting Austrian economics.--Esuric
I agree.
IMHO, if von Mises was flawed on one point, it would be that empirical evidence does indeed exist to support the Austrian school.
I am new to the Austrian school, however I was drawn to its arguments by empirical evidence when contrasted with other models. Moreover, I am more interested in the practical application of economic knowledge versus theoretical discussions. As a result, the more the Austrian school is examined under real world conditions, the more convincing the arguments for its adherence.
However, I would like to know at what percentage of government intervention in the economy is most beneficial to Austrians? For example, if government is "bad", then presumably zero government would be the ideal. This conflicts with my chosen standard of the Rahn Graph of approximately 20% government/GDP.
I understand that the scope of government as opposed to the size may be more important from an Austrian perspective. For example, government that does not choose "winners and losers" is acceptable irrespective of the percentage of GDP dominated by government.
How much government/GDP is ideal among Austrians ? Equally important, how'where does government dispense its largess?
One should point out that a few econometric studies, "America's Great Depression" and a few blog posts doesn't count as empirical work in favour of the ABCT. Of course, some here are aware of this, what really surprised me is that the answer to this went something along the lines of "sure, but if the empirical work was done, it would support Austrian economics".
"You don't need a weatherman to know which way the wind blows"
Bob Dylan
the "science" of economics is meaningless when examined at the level of a single transaction. No doubt many irrational, biological, and psychological anomalies occur throughout the economy in a given moment (my wife's shopping habits as an example). However, when examined in the aggregate, these non-purposeful reflexes are filtered out as inconsequential noise.
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Rettoper: For example, government that does not choose "winners and losers" is acceptable irrespective of the percentage of GDP dominated by government.
For example, government that does not choose "winners and losers" is acceptable irrespective of the percentage of GDP dominated by government.
There can be no such government. All government action is a zero-sum game, or more accurately, a negative-sum game. Any benefit that accrues to one must always come at the expense of another.
Rettoper: However, I would like to know at what percentage of government intervention in the economy is most beneficial to Austrians?
However, I would like to know at what percentage of government intervention in the economy is most beneficial to Austrians?
None! Although those Austrians that adhere to the more traditional classical liberal position would say very little. Certainly not 20%! That's huge!
Your "standards" are nothing but arbitrary and meaningless numbers.
How much government/GDP is ideal among Austrians ?
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I'm goign to go ahead and guess for most people, it would be ....... 0
There can be no such government. All government action is a zero-sum game, or more accurately, a negative-sum game.
Does repeating this shit everyday help convince you that you're something other than a vocal minority who doesn't have much interesting to say? Seriously, there's a whole bunch of economics out there that says otherwise, the fact that you prefer to go with clowns like Hoppe is fine, but it's not an excuse to be ignorant of econ 101.
"One should point out that a few econometric studies, "America's Great Depression" and a few blog posts doesn't count as empirical work in favour of the ABCT. "
One must actually understand ABCT in order to even attempt to validate it by some emprical data.
Now, it has already been established here that you don't know diddly-squat about Austrian Capital Theory or ABCT. So why should anyone even bother to check the validity of your sources?
Rettoper,
I don't think Mises claimed that there was no empirical evidence in support of the Austrian school. Both Mises and Hayek agreed that empirism was useless in validating theory (Mises believed it was useless in falsifying theory, while Hayek did not). There's a difference between using empiricism as a method of validation, and empiricism as a method of illustration. All Austrians, to some degree or another, have used empiricism and historicism as a means of illustrating praxeological theory.
"Does repeating this shit everyday help convince you that you're something other than a vocal minority "
Yes, I'm obviously a vocal minority, which of course, is the only possible way for you to discredit what I've said. By the science of the "truth is in the majority".
" Seriously, there's a whole bunch of economics out there that says otherwise"
It is impossible to say otherwise according to Subjective Theory of Value. Those other economists are applying objective value theories to make their unproven assertions. Oh, and I prefer to go with clowns?