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If this controversy been "resolved" by most of the economics profession today in favor of some version of the aggregate demand view, what does that say about economics as a science? If the majority is wrong (as Austrians believe) -- after all of these years of discussion -- where is the science? Are we using the word "science" just to impress people?
Economics as a Coordination Problem -- Even in Tough Times It is Important to Stress This
|Peter Boettke| Mathieu Bedard recently brought my attention to the following quote from Robert Leonard's excellent Von Neuman, Morgenstern and the Creation of Game Theory: From 1928, Hayek and Morgenstern had been the co-directors of the [Austrian Trade Cycle Institute], with its tiny staff. [...
On a related note, there was a very recent conference at the NBER in Cambridge about the Fed and the *first* hundred years. If you look at the cast of invitees you do not see any serious re-evaluation of the Fed -- anything fundamental has been ruled out by the Establishment.
Gold as a Hedge; Gold as a Standard
|Peter Boettke| Gold is back in the news. Since 2001, and then with the onset of the financial crisis in 2008, the price of gold rose drastically as investors sought to hedge against extreme events on the bad side. But also as the Fed has responded to the crisis with one round of quantitativ...
There is a Chinese (I think) saying that a fool can ask more questions in an hour than a wise man can answer in a lifetime. This list reminds me of that. I would adjust it as: A fool can make more errors in a relatively short column than a wise man can correct in a lifetime.
The errors seem to be of two major kinds: (1) A&L often can't distinguish the general rule from the exceptions; (2) They do not realize that most economists do not take the idealizations of economic theory literally. These idealizations require a certain judgment to apply.
Complications of the basic model are important but often irrelevant to basic policy. And what's more: public choice considerations often spoil attempt to be subtle -- like counteracting foreign subsidies with domestic tariffs.
Econ 101 is What is Needed Most
|Peter Boettke| Robert Atkinson and Michael Lind have it exactly reverse. Econ 101 isn't what is killing us, it is the denial of the practical impliactions of the science of economics that is. One must always remember that simple economics -- basic principles derived from the logic of action in...
Your words are good and true to the man.
I remember Leonard from my college days at Fordham. I met him through Murray Rothbard during the late 1960s. Radicalism was everywhere in the air then. We libertarians -- Leonard and Murray included -- were trying to figure out if we could make common cause with the so-called "New Left." That ultimately went nowhere for what are now obvious reasons.
Leonard has spent his life building liberal and Austrian movements. I have learned much from Leonard both intellectually and about dedication to a purpose. Thank God he has come our way. Ad multos annos.
Happy 80th Birthday Leonard Liggio
Steven Horwitz Let me take a moment to wish a happy 80th birthday to one of the most important figures in the modern libertarian movement who many of you might not know: Leonard Liggio. Leonard has been around the movement since his youth, having spent time with Rand and Rothbard and being one o...
The problem is the combination of democracy and the idea of the omnipotence of democracy. This was thoroughly discussed by classical liberals in the 19th century -- Herbert Spencer, Alexis de Tocqueville, William Lecky, Thomas Babington Macauley and others. I like the line from Herbert Spencer -- the political superstition of previous times was the divine right of kings; the political superstition of the present is the divine right of parliaments. I am not sure there is much we can do about this today. The genie is out of the bottle.
Liberalism is a Guiding End, Democracy is Merely a Means
|Peter Boettke| The web is a buzz with discussion of Hayek's affinity with right-wing dictatorship. In these discussions, the line between the consistent and persistent implications of some intellectuals theory and their own personal practical political vision is often blurred. In an important...
Once again my comment -- morally decent and intellectually perfect -- was deleted. There is a communist somewhere in this system.
Contrasting Visions of the Role of the Economist
|Peter Boettke| Ludwig von Mises argued in Human Action that: "It is impossible to understand the history of economic thought if one does not pay attention to the fact that economics as such is a challenge to the conceit of those in power." p. 67 On the other hand, Thomas Pogge believes the foll...
Very odd clip. But I do think it shows the limits of economics as a "science." I am not saying that Stiglitz's economics is just as good as anyone else's. What I am saying is that when you deal with issues that are as interwoven with political, moral, and ideological considerations, economists have -- in practice -- a hard time keeping all of these considerations separate. He is not wrong that economists can have an interest in believing certain things. But Stiglitz is not the exception he thinks he is. After all, he is in the business of promoting Soros's brand of "new" economic thinking.
Lucas, on the other hand, thinks of economics as the discipline that invents toy economies that do not "easily" relate to real economies or real economic policy. But he loves his mathematical precision. What is his interest? Not the real world, I am afraid.
So the answer is they both fit into a profession that has lost its way.
What Does It Say About a Discipline When the Term "Mainstream" Applies Equally to Joe Stiglitz and to Bob Lucas?
|Peter Boettke| HT: Roger Koppl
Yay, Pete! You didn't forget. Neither did I.
http://thinkmarkets.wordpress.com/2013/05/08/f-a-hayek-his-114th-birthday/
I have a similar picture hanging in my office (slightly different pose). But I had the nasty napkin taken out.
Happy Birthday Professor Hayek
Mises is so screwed up on methodology that I wish I have never read that first section of Human Action. It is not that his position is entirely wrong but he doesn't know how to explain it. He uses terms very carelessly.
The only interpretation of Mises on methodology that makes any sense to me is that produced by Roderick Long in his yet-unpublished, but available, book on Wittgenstein and Austrian Economics. You can find it on Mises.org and on Roderick's web page.
But then we must ultimately thank Wittgenstein for this.
Implications of Machlup's Interpretation of Mises's Epistemology
We argue that Machlup's (1955) interpretation of Mises’s epistemology is at least, if not more, plausible than Rothbard's (1957). The implications of Machlup’s interpretation of Mises and Austrian epistemology affect Austrians, non-Austrians and how they relate to each other. Machlup’s interpret...
My comment was deleted. ???!!!
Market-Destroying Institutions: Why Emergency Policies in Cyprus Embody all that is Wrong about Europe
~ Frederic Sautet ~ Some depositors at Cyprus’ largest bank may lose a lot of money (e.g. see article in FT). Those with deposits above €100,000 could lose 37.5 percent in tax (cash converted into bank shares), and on top of that another 22.5 percent to replenish the bank’s reserves (a “special ...
As we know, there were economists recommending expanding government spending during recessions even before Keynes made it his own policy. The source was the old Chicago school. I am saying that there was this kind of macro-thinking even before the Keynesian revolution.
How the Keynesian Revolution Changed Everything
|Peter Boettke| That was the title of a talk I gave last week at a joint IHS/Mercatus conference. My argument was rather simple --- Keynesianism changed everything because it changed the language we used to discuss economic issues, and by controling the language Keynesianism controlled the way ...
I have used Larry's book for the past three years (first in manuscript form). It is truly excellent.
Larry White at Hillsdale -- The Great Debate Lecture
|Peter Boettke| During the fall 2012 term I taught Larry White's The Clash of Economic Ideas in 2 of my classes -- 1 undergraduate and 1 graduate. It is an amazing work -- extremely readable and, dare I say, entertaining as it is full of history and fascinating personalities, yet also serious s...
I hate the new way comments are to be posted. I don't know what I am doing.
There is no Mariorizzo.wordpress.com
Mario Rizzo.
The Rule of Law and Economic Policy
|Peter Boettke| In my PhD seminar Econ828 this evening we will be discussing Part II of Hayek's The Constitution of Liberty. This section of the book raises several important issues for political economists to think about, but most important in my opinion is the quesiton of the relationship of ...
So he changed his mind on redistribution from the position in The Constitution of Liberty?
Mario Rizzo.
The Rule of Law and Economic Policy
|Peter Boettke| In my PhD seminar Econ828 this evening we will be discussing Part II of Hayek's The Constitution of Liberty. This section of the book raises several important issues for political economists to think about, but most important in my opinion is the quesiton of the relationship of ...
I have experience teaching a course on classical liberalism in one form or another for twenty years. I can say with some confidence that economists generally have very little clear knowledge of what it is. One economics major thought economic liberalism meant the "efficient markets" hypothesis.
We must also remember that Keynes made a mess of the definition of "liberalism" with his dichotomy between the macro sector, including the "socialization" of investment, and the micro world where mom and pop firms could do what they want.
It is also the case that some economists do not consider big redistributionist schemes as in any way hindering the liberal economic order. I guess they believe something like John Stuart Mill's split between the laws of production and the laws of redistribution.
Of course, we can argue about the purity of liberal policies but I do not think it is too much to ask that people recognize the mixed- economy interventionism is the dominant view in the west.
(On a contentious political note, one could hardly listen to Obama Inaugural address and think economic liberalism is the dominant ideology.)
Compare and Contrast --- Economic Analysis of Mercantilism and Its Contemporary Relevance
|Peter Boettke| Here is Dani Rodrik writing on Januray 9th of 2013. Here is Murray Rothbard writing in November 1963. Rodrik claims that "The liberal model has become severely tarnished, owing to the rise in inequality and the plight of the middle class in the West, together with the financial c...
I was also impressed by the documentary, "The Power of Nightmares" which I think of as a companion piece in many ways. It shows the psychological role of scaring people in building a large defense establishment. You can now view it in whole or part free of charge.
http://topdocumentaryfilms.com/the-power-of-nightmares/
Why We Fight
|Peter Boettke| One benefit of coping with the flu, is the opportunity to catch up on things you wanted to watch but haven't had the opportunity to watch. So I watched the documentary Why We Fight, which is about the rise and maintenance of the military-industrial complex. This documentary d...
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