Potpourri
==> Whether North Korean officials actually said this, or whether it is US propaganda to get Americans mad, either way it’s hilarious: They allegedly called the US mainland a “boiled pumpkin.” Who can drop bombs after such a funny insult?
==> Robert Higgs looks around at today’s libertarians, and he’s none too impressed. His op ed reminded me of Alec Baldwin in Glenngarry Glenn Ross (naughty language).
==> I did an interview on financial topics with a guy named Mo, but alas, he didn’t call me a wiseguy.
==> All joking aside for the moment, this abortionist grand jury stuff is pretty shocking. I can understand why people are outraged that it isn’t getting more media coverage.
==> David R. Henderson points out that “crying wolf” warnings from government are counterproductive. I thought the same thing when I was growing up, because there was a definite point at which I noticed the disclaimers on TV commercials got ubiquitous. All of a sudden, every product had an announcer speed-reading a list of awful things that might conceivably happen if you took Product X. At first comedians made fun of it, but after a while you got desensitized, such that nobody even listened to the warnings anymore. Hey, everything causes cancer. You shouldn’t take anything if you’re pregnant or have a heart condition. Etc.
==> Some of my favorite bloggers have been having a war over interest rate theory. As this was the subject of my dissertation, you’d think I’d be hip-deep in it by now. (In the sense that I would be commenting, not that any of them would acknowledge my existence.) I understand quite well what Krugman and DeLong are saying, but unfortunately I am not really clear on the Cowen/Andolfatto/Williamson position (and in fact I wonder if the latter three even have the same position, since I think Williamson embraces fiscal policy while the other two say their diagnosis leads to a different prescription).
But none of that matters. The important thing is the following, hilarious exchange:
First, DeLong took Cowen out to the woodshed for (allegedly) failing to make a distinction that Knut Wicksell made in 1890. Then DeLong ends with, “This is not rocket science. This is basic Geldzins und Guterpreis…”
Then, Cowen shoots back with a long post containing this quick line amidst all of the boring econ chatter: “Brad also chides me for neglecting “basic Geldzins und Guterpreis”, but speaking of basics he neglects the umlaut and also the plural on “price”, so it should be “Güterpreise“, the German-language title then being translated somewhat inexactly into “Interest and Prices.””
DA-YUM! That may not sound snippy to you outsiders, but that was the academic equivalent of Tyler saying, “Hey Brad, I got your Knut right here.”
1. Both DeLong and Krugman are basing their theories on the singular natural Wicksellian interest rate framework. Where’s Lord Keynes and his spitball shooter?
2. Higgs can’t find any big name libertarians like Rothbard because libertarianism as a theory hasn’t changed much since Rothbard. And why is that? Becuase there hasn’t been any serious intellectual challenges to libertarianism. Communism has been discredited. The wall fell. The only challenger to libertarianism is now is mob rule. There hasn’t been any anti-libertarian theory advanced that could even be considered in the same intellectual league as libertarianism. And how can there be? Intellectual challenges themselves non-aggressive activities. To intellectually engage libertarianism, is really to sanction it as a theory. Libertarian theory as it stands today is very convincing, and so it shouldn’t be surprising or concerning that there are few if any significant changes to the theory via new, big name writers.
3. Re: abortion, I think Block’s property rights based “evictionism” is apropos.
Sorry for the cringe-worthy typos.
re: “1. Both DeLong and Krugman are basing their theories on the singular natural Wicksellian interest rate framework. Where’s Lord Keynes and his spitball shooter?”
+1
I think the “single natural rate” thing is interesting but overblown in its significance.
One reason why it’s more relevant for Hayek, of course, is that Hayek is putting capital heterogeneity front and center. That makes it a little more awkward than Keynes, who does not put it front and center.
Daniel Kuehn wrote:
One reason why it’s more relevant for Hayek, of course, is that Hayek is putting capital heterogeneity front and center. That makes it a little more awkward than Keynes, who does not put it front and center.
I love it! Daniel gets to criticize Hayek vis-a-vis Keynes, without conceding the Austrians’ complaints about Keynesian assumptions about a blob of capital. Daniel could join the circus as a tightrope walker, if the economy gets really bad.
“Daniel gets to criticize Hayek vis-a-vis Keynes, without conceding the Austrians’ complaints about Keynesian assumptions about a blob of capital.”
While assumptions about homogenous capital may apply to neoclassical synthesis Keynesians, it does to apply to Keynes himself or Post Keynesians.
See Mark Hayes, “Keynes’s Z-function, heterogeneous output and marginal productivity,” Cambridge Journal of Economics 31.5 (2007): 741-753:
“Keynes was adamant that the assumption of homogeneous output and capital in macroeconomic theory is inadmissable. “ p.
“Keynes was adamant that the assumption of homogeneous output and capital in macroeconomic theory is inadmissable.”
Adamant was he? More like merely mentioning that capital is not homogeneous.
“Let Z be the aggregate supply price of the output from employing N men, the relationship between Z and N being written Z = f(N), which can be called the aggregate supply function. Similarly, let D be the proceeds which entrepreneurs expect to receive from the employment of N men, the relationship between D and N being written D = f(N), which can be called the aggregate demand function.”
“Now if for a given value of N the expected proceeds are greater than the aggregate supply price, i.e. if D is greater than Z, there will be an incentive to entrepreneurs to increase employment beyond N and, if necessary, to raise costs by competing with one another for the factors of production, up to the value of N for which Z has become equal to D. Thus the volume of employment is given by the point of intersection between the aggregate demand function and the aggregate supply function; for it is at this point that the entrepreneurs’ expectation of profits will be maximised. The value of D at the point of the aggregate demand function, where it is intersected by the aggregate supply function, will be called the effective demand. Since this is the substance of the General Theory of Employment, which it will be our object to expound, the succeeding chapters will be largely occupied with examining the various factors upon which these two functions depend.”
and then
“It is my belief that much unnecessary perplexity can be avoided if we limit ourselves strictly to the two units, money and labour, when we are dealing with the behaviour of the economic system as a whole; reserving the use of units of particular outputs and equipments to the occasions when we are analysing the output of individual firms or industries in isolation; and the use of vague concepts, such as the quantity of output as a whole, the quantity of capital equipment as a whole and the general level of prices, to the occasions when we are attempting some historical comparison which is within certain (perhaps fairly wide) limits avowedly unprecise and approximate.”
Sure, Keynes also wrote:
“Since resources are not homogeneous, there will be diminishing, and not constant, returns as employment gradually increases.”
and
“Moreover, if equipment is nonhomogeneous and some part of it involves a greater prime cost per unit of output, we shall have increasing marginal prime costs over and above any increase due to increasing labour-costs.”
But that doesn’t mean he integrated heterogeneous capital into his theory of the economy as a whole.
Keynes’ treatment of heterogeneous capital is pedestrian and shallow. Hayes is tiptoeing on hand grenades and pretending to be doing a rendition of Swan Lake.
The reason why Keynes is treated as holding a theory of homogeneous capital, is because his namesake conclusions are logically grounded on aggregating labor, capital, and output.
In-line with your remark on Robert Higgs and libertarianism, where are all the new and big name Egoists?
Probably regrouping and hesitant to make the first move.
Libertarian theory has changed in different ways for different people. If you’re still more-or-less a strict adherent of Rothbardian libertarianism, then the political philosophy probably hasn’t changed much for you. But, other libertarians aren’t Rothbardians, and have a political philosophy much closer to liberalism — a pluralist philosophy. You can think of it as a libertarian Rawlsianism. I think the changes libertarianism is going through are great, because they mostly consist of internal criticism. Now that the philosophy in general is out there, we really do need to critically evaluate each other and build more solid foundations.
Of course there are giants in the past. There is only so much you can accomplish today if you build on what has been done yesterday. Still plenty of smart people full of energy, just smaller (and less visible) difficult problems.
Even in scholarship there are diminishing returns.
And where are the Einsteins, the Bohrs, the Rutherfords, the Curies of the modern physics movement?? Yes, I am aware of Stephen Hawking, but his work is black holes, which evaporate and disappear into nothingness, so his contributions are bound to be transitory….
Seriously though, I love Higgs. In fact, I think of him as one of the ‘giants’ of our time. But that was an unnecessary article! I mean, he didn’t even offer a solution! Basically he’s saying, “No one today is as smart as Rothbard or Mises… isn’t that a shame? And since no single person is that smart…, uh….” Higgs doesn’t even say why not having any giants is a bad thing! I mean, it very well could be that while it is true that no single person today is as big as Mises, Rothbard, Hayek, etc., the movement as a whole is much bigger–much wider and much deeper–and can still eclipse all those giants of the past!
Higgs says, “none of them [the present day libertarians] comes close to the giants of the immediately preceding generations.” This may be true… but so what?? It’s not like there is a drought in libertarian scholarship. Would Higgs prefer a libertarianism that only has 5 “giant” theorists, or 500 smaller–but still very smart and engaging–thinkers?
Ever thought that this stuff might increase if you outlaw abortion per se?