Hey forum people,
some dude's criticism of austrian economics, I am not learned on the technicalities of austriansim so its hard for me to discern right and wrong. eat this shit alive.
http://www.reddit.com/r/Economics/comments/i2y8f/debunking_austrian_economics/
haha they don't criticize it they ignore it. The only arguments i hear is that low interest rates don't create inflation. It's when they go up that people notice it.
and to kenyesians there is no such thing as bank fraud or fractional reserve. They use terminology to undermine legitimate criticism like (excess reserves) and demend deficiency (which isn't a real thing) They obfuscate what money and credit are too. "Money isn't real" hahaha
economic schools of thought are like religions.
Eating Propaganda
What do you mean i don't care how your day was?!
The articles are from a Post-Keynesian perspective not a Keynesian one. Just out of interest, did you read any of the pieces linked to?
I am not learned on the technicalities of austriansim so its hard for me to discern right and wrong. eat this shit alive.
If you are not sure of the technicalities of austrian economics then why are you so keen to see any opposing view 'eaten alive'? It seems you have made your mind up before actually looking at the evidence.
i glanced at a few, but they weren't really refutations as much as they were excerpts where the author claimed "not true!"
Unfortunately Rothbard (on deflation) falls under the same circumstance as Marx when asked how to fix the economy: there are two actions (Marx knows he must use what is leftover from the capitalist system and Rothbard realized that his point was only valid if we started from what he calls "Point Zero."
as far as the author goes to make it seem like Rothbard is in contradiction by seemingly using Bagus (an austrain neconomist) to refute it, but he is merely pointing out that Rothbard doesn't have a good answer for where we are today and how to fix it. It is the same coin, but the opposite side of Marx when Marx was attempting to to rationalize the practicality of his system and not the principles involved. Rothbard is only focusing on the principle because he knows that practically he cannot say "Force redistribution" even though he is trying to fix a corrupt system.
The article i read through wasn't a refutation, but a misleading interpretation of growth deflation vs. excessive credit demand restriction. Yes deflation is harmful if credit has been expanded and people are comfortable (the market is smoothly functioning) thne the credit supply is cut dramatically. It doesn't take a genius to figure that out. And Bagus criticism of Rothbard is actually unfair towards the end. He says that Rothbard violates his own ethics by not applying it to monetary issues. This itself is misleading as i explained above there is a difference in analysis from practicality and principle. Can you not violate ethics when you are supposedly trying to dismantle a very unfair system. Is it wrong to disenfranchise the bankers and credit hogs if they are the problem? Maybe, maybe not. I'd have no issue with hanging (through criminal justice of course!) some of the bankers around the world. They know what they are doing.
OK, it'm glad that you took a read of the links; i was under the impression that you just dismissed them out of hand. I agree that the guy writing these articles falls short of a decent critique. It was just your comment about Keynesians ignoring the Austrian school and assuming that low interest rates never cause inflation. From the first link entitles 'The Austrian Theory of Inflation';
He (Shostak) is right that the inflation rate (the rate of increase in a price index like the CPI) and changes in the level of prices also depend very much on real factors, as well as monetary ones. For example, the following factors could tend to decrease the level of prices:
1. the falling prices of specific goods through increasing productivity or output; 2. an appreciating exchange rate; 3. a rise in cheaper imports into a country; 4. falls in the prices of imported basic commodities that are factor inputs; 5. changes in the velocity of circulation of money; 6. higher unemployment (= less demand for goods and services), and 7. a fall in extension of bank credit.
Point number seven seems imply that this guy sees low interest rates as possibly inflationary source, for if a fall in credit extension suppresses inflation then a rise in credit extension (which low interest rates would bring about) would promote it. Admitedly he does not explicitly state it this way, it does appear that he would concede this point.
point 7 i would also take as the main one. (i like rothbard)
point 1 is not a bad thing
point 2 is possibly good or bad policy from foreigners or from a decline in domestic currency. PrinMonetizing debt, anyone?
point 3 could be productive incresases in that exporting country
point 4 is a fall in raw materials costs which is an extension of a few other possible factors
point 5 - im not sure i buy velocity as a measurable thing in normal terms, it certainly is if the banks are increasing credit haha
point 6 duh
yea. people who have blogs dedicated to this sort of thing...i don't know. It's a logical fallacy to think that by refuting others you can prove your point. and while it seems i may be doing that now; at least i am stating it. POSSIBLE CONFIRMATION BIAS! haha
26 links. Would take a book to deal with all of them.
Here's a reply to a link about Say's Law.
http://smilingdavesblog.blogspot.com/2011/06/reddit-buries-austrian-economics-in.html
The more I get Say's Law the more I understand that disagreeing with it is just the kind of nightmare Orwell described, on a par with his famous trio,
"War is Peace, Freedom is Slavery, and Ignorance is Strength."
My humble blog
It's easy to refute an argument if you first misrepresent it. William Keizer
I stopped reading after this (this is the very first thing he says btw):
Typically, they complain that any increase in the money supply must always lead to a rise in the price level or the inflation rate.
There literally isn't a single economist in the world that holds this position. The very first sentence is a ridiculous straw man.
"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."
I actually think Malthus has a lot to offer economics, but Kenyes convinced people to focus on the bad things. Say's Law(s) is a general common sense thing. When i first heard the term "demand deficiency" i thought to myself..."I always want things. A new car, new computer, new guitar, etc. I can't have them because i need to produce them. There is never and can never be a deficiency of demand. There is only a lack of supply which means prices are higher which means i can't just have things."
Only about a year later did i actually give a look into Say's writings. He has a quote: "The needs of man are unlimited." It really is common sense. These arrogant "economists" invent problems so they can feel smarter than others and get their way in terms of policy. (and by extension society).
Smiling Dave!!
great post. i have myself flipped through a few pages of that nonsense. They try and paint Rothbard as logically inconsistent. Logical consistency was like a pet peave of his.
Al(l)most all of their criticism is born of misunderstanding. Austrianism is a little more complicated than "AD=AS and the world goes 'round."
http://eatingpropaganda.blogspot.com/
i tried posting this as a comment on the latest post about reddit and austrian economics, but it wouldn't take. Just ran me to log in over and over
Thanks Jacob.
I don't know what's with the comments there. Had the same problem myself.
I stopped reading after this (this is the very first thing he says btw)....
Everyone goes into any debate with a subjective point of reference from which they can draw conclusions. i happen to think that for the most part Austrians have it right. I am no expert. i just wanted to see what people who have to say about this. I have seen some evidence. i could never have the time to look at it all so i must refer to experts to help me. I apologize if you think I am close minded, im only limted by the scarcity of time.
I have a question regarding the linked article. In the comments Lord Keynes, in his first reply to a comment by Major Freedom says "ABCT as a serious explanation to 2001-2009 cycle is a total joke." Followed by quoting Rothbard in Man,Economy, and State where he says "To the extent that the new money is loaned to consumers rather than businesses, the cycle effects that are discussed in this section do not occur." Lord Keynes then continues by saying it was consumer loans that caused the crisis, and consumer loans have nothing to do with ABCT. Where is he wrong on this?
"It is easy to be conspicuously 'compassionate' if others are being forced to pay the cost." - Murray N. Rothbard.