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Steve K might also consider this: https://www.aei.org/publication/taking-the-name-of-lord-keynes-in-vain/
Mill > Keynes, so says Steven Kates
|Peter Boettke| Steven Kates has an interesting essay at Liberty Matters addressing what was the conventional wisdom in "macroeconomics" at the time of John Stuart Mill, how that was transformed by John Maynard Keynes, and what was the consequences as a result. In Kates's narrative, knowledge w...
Barkley, would you care to enlighten us as to the idiocy of Mill's Fourth Proposition? I think it demonstrates that Mill knew a fundamental truth about micro rather than revealing his ignorance.
Hayek gets it right in the appendix in TPTOC, as do Moss and Vaughn in HOPE in 1986 and Jerry in his 1977 book.
Mill > Keynes, so says Steven Kates
|Peter Boettke| Steven Kates has an interesting essay at Liberty Matters addressing what was the conventional wisdom in "macroeconomics" at the time of John Stuart Mill, how that was transformed by John Maynard Keynes, and what was the consequences as a result. In Kates's narrative, knowledge w...
I don't get your point Barkley. Producers respond to what they perceive as consumers' evaluations of course. But consumers can only demand with the proceeds of their prior production, itself dependent on successful anticipation of consumer demands. That economic value ultimately comes from the subjective judgments of individuals in their capacity as consumers doesn't mean that spending is the source of wealth. Wealth creation comes from producers who *correctly anticipate* the valuations of consumers, not from the act of spending itself.
Mill > Keynes, so says Steven Kates
|Peter Boettke| Steven Kates has an interesting essay at Liberty Matters addressing what was the conventional wisdom in "macroeconomics" at the time of John Stuart Mill, how that was transformed by John Maynard Keynes, and what was the consequences as a result. In Kates's narrative, knowledge w...
Two more links:
1. A Freeman piece of mine on Say's Law: http://fee.org/freeman/detail/understanding-says-law-of-markets
2. Chapter 3 of the late Larry Sechrest's book is also excellent on these issues: https://mises.org/library/free-banking-theory-history-and-laissez-faire-model-0
Mill > Keynes, so says Steven Kates
|Peter Boettke| Steven Kates has an interesting essay at Liberty Matters addressing what was the conventional wisdom in "macroeconomics" at the time of John Stuart Mill, how that was transformed by John Maynard Keynes, and what was the consequences as a result. In Kates's narrative, knowledge w...
Several quick thoughts:
1. The best understanding of "Say's Law" is that "production is the source of demand." That aligns with Steve K's point, and Rothbard's, that "spending" cannot get you out of a recession. Say's Law is the rejection of "demand-side" economics.
2. Say recognized that money mattered. The later versions of "Say's Law" that ignored money and suggested that, esp. in Keynes's caricature, that macroeconomic equilibrium always held in a "free market," simply did not understand the basic idea. I am not even sure those folks really knew Say.
3. I like thinking of the Law of Markets as simply an extension of Smith's insight that the division of labor is limited by the extent of the market. Production is what creats the wealth that defines the extent of the market, which is itself a result of the increased division of labor. The Law of Markets is looking at Smith's insight from a "macro" perspective in some sense.
4. And, as usual, Jerry has it right. Mill's proposition is at the heart of Austrian macro, which is why microfoundations matter so much (hence, my book on that topic). It is money that makes this whole Smith/Say process (and note that word) possible, but it also opens up the possibility of coordination failure if money isn't right. This is at the heart of Hayek (and Mises) and captured by Roger Garrison's "loose joint" terminology.
5. Finally, if we are in a general glut caused by an insufficient money supply, increasing the money supply is the appropriate remedy. That is required to restore the monetary framework necessary for production to be translated into demand. That point is consistent with a money-enhanced version of the Law. It also implies that increasing the money supply beyond the point of monetary equilibrium will NOT generate additional growth/recovery, at least over time.
Again, I deal with all of these issues in my Routledge book, both in the MET chapter and chapter 6 which is on Hutt and Say's Law.
Mill > Keynes, so says Steven Kates
|Peter Boettke| Steven Kates has an interesting essay at Liberty Matters addressing what was the conventional wisdom in "macroeconomics" at the time of John Stuart Mill, how that was transformed by John Maynard Keynes, and what was the consequences as a result. In Kates's narrative, knowledge w...
I'm not sure if this speaks to Barkley's concerns or not, but here's an Austrian "take" on Say's Law (and there is similar material in my Routledge book). I don't think there's anything distinctly Austrian about Say's Law, but I do think there's an important insight there that is consistent with the Austrian emphasis on microeconomic coordination. http://myslu.stlawu.edu/~shorwitz/Papers/Say's%20Law-Elgar.pdf
Mill > Keynes, so says Steven Kates
|Peter Boettke| Steven Kates has an interesting essay at Liberty Matters addressing what was the conventional wisdom in "macroeconomics" at the time of John Stuart Mill, how that was transformed by John Maynard Keynes, and what was the consequences as a result. In Kates's narrative, knowledge w...
You know, I did not even NOTICE that!
Vons Asinorum
Steve Horwitz One of the really strange charges laid against Mises (and sometimes Hayek) is that their honorific "von"s were evidence of their disdain for the common person and that their preferred policies and institutions were really all about enhancing the power of the already powerful. In it...
A quick Google search indicates there is no reference to him editing such a collection beyond whatever role he had in setting up the online resource at the Hoover Institution, plus some unclear "forthcoming" thing with Palm. Wouldn't there be Google traces if he actually had a contract with a press?
Robert Leeson, Hayek and the Underpants Gnomes
|Peter Boettke| There has been ongoing flame war going on at the SHOE list, which is the discussion list for history of economics. The list generally serves as a means of obtaining information on conferences, jobs and new books and articles that might be of interest to scholars in the field. T...
His "scholarship" is the equivalent of what you'd read in the check-out line at the supermarket.
Robert Leeson, Hayek and the Underpants Gnomes
|Peter Boettke| There has been ongoing flame war going on at the SHOE list, which is the discussion list for history of economics. The list generally serves as a means of obtaining information on conferences, jobs and new books and articles that might be of interest to scholars in the field. T...
Murray doing his best Jackie Mason. If that was filmed in the Catskills, it would be even better!
Murray Rothbard Teaching Economics
|Peter Boettke| As an undergraduate one of the most amazing intellectual experiences of my life was reading Murray Rothbard's For a New Liberty. I had already read Milton and Rose Friedman's Free to Choose, Henry Hazlitt's Economics in One Lesson, and various articles and some books of Ludwig v...
In other words, Troy, as Art and I say in the piece: "Note that externality problems are market "failures" only in comparison to the perfectly competitive model's equilibrium. In other words, the "failure" here is not that markets "do not work" in practice, but that they fail to live up to a blackboard ideal. As it turns out, by that criterion, markets "fail" all the time! No actual market is ever in perfectly competitive equilibrium, not even the commodity markets we sometimes point to in introductory courses."
The Failure of Market Failure
Steven Horwitz Art Carden and I have the monthly feature at Econlib: "Is Market Failure a Sufficient Condition for Government Intervention?" We think it's a useful and accessible primer on why pointing out various forms of so-called "market failure" (e.g. negative externalities, public goods, et...
Yeah, I can't for the life of me imagine why you've been banned at multiple places....
The Failure of Market Failure
Steven Horwitz Art Carden and I have the monthly feature at Econlib: "Is Market Failure a Sufficient Condition for Government Intervention?" We think it's a useful and accessible primer on why pointing out various forms of so-called "market failure" (e.g. negative externalities, public goods, et...
Pfloyd: http://blog.independent.org/2011/09/23/the-stagnant-u-s-economy-a-graphical-complement-to-higgs-contributions/
My Boudreaux Impersonation
Steven Horwitz In the spirit of Don Boudreaux, here's a letter to the editor I just sent off to the Watertown Daily Times in response to a letter arguing that the problem facing recovery is insufficient consumer demand, thus more stimulus is needed. February 5, 2013 Letters from the People Wat...
Not quite Daniel. At least the Austrian claim is not that recalculation "incited" the downturn, but that the length and depth of the downturn will be related to the degree of recalculation must take place. And as Tyler rightly points out, one can believe that it is both necessary to ensure that "aggregate demand" (I'd rather say MV) is stabilized and best if markets drive the process of recalculation that is required to come out of the slump. I think, as Tyler also said, that was Hayek's view in, say, *Prices and Production* if not later. I'd also say it's the position that Austrians like me, Selgin, White, Garrison, hold to today. Some other Austrians, not so much. The Austrian objection, from my perspective, is not to stabilizing aggregate demand per se, but to the ways in which many policies, especially fiscal ones, designed to increase aggregate demand themselves block the needed recalculation process.
Department of "Huh?!"
Tyler Cowen calls me a semi-pseudo Hayekian: >Assorted links: 5. Brad DeLong, slouching toward recalculation... But that's not it at all! The point of [Anatomy of Slow Recovery](http://www.project-syndicate.org/commentary/delong112/English) is to build on [Dan Kuehn's use](http://factsandotherstu...
Which is why I was very careful to say "Keynesian" and attempt to avoid the issue of whether Keynes himself was a "Keynesian."
Consumerism and Keynesianism
Steven Horwitz I'm linking to my FreemanOnline column today as it deals with the issue of why consumption is not the key to economic growth and the point that it only became a fixation of economists since the Keynesian revolution. Thus: The great irony is that leftists frequently argue that cap...
Jesus Huerta de Soto's recent book on Austrian economics, which is also designed as an intro/primer, suffers from exactly the same problem: it's as if Austrian economics ended sometime in the early 80s, if not earlier (with Kirzner in the 70s). JHdS's book also has a more Rothbardian take on monetary theory that I think is wrong, but it's certainly part of the Austrian school.
Austrian Economics - A Primer
I've just received my copy of Eamonn Butler's latest primer, on Austrian Economics (download as a PDF here). As far as short, accessible introductions to Austrian Economics go I highly recommend it (see here for others). It is a useful addition to the secondary literature, but writing this as a ...
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