Would a Keynesian Lie to Advance His Political Agenda?
I don’t know, but Matt Yglesias would lie to save money on soap.
Danny Sanchez complained about this in strong terms on Facebook, and I assumed he was exaggerating. But nope, it doesn’t even sound very ironic; Yglesias is literally telling people to they should lie to Amazon so they can get stuff cheaper.
I realize I sound like the Church Lady here, but this is really disturbing. It’s one thing when Krugman says we need “death panels” or DeLong says someone should be fired as an economist. Yes it’s not funny but they at least “are just joking.”
But Yglesias isn’t joking. He admits he lied about having a baby, tells his readers to do so, and even speculates that in so doing he might force Amazon to stop giving discounts to mothers.
This makes me feel just a little bit creepy, like when I see anything by “Anonymous” or like that Seinfeld episode when George’s fiance dies from licking the envelopes and they just moved on as if nothing happened. Just felt a bit creepy. I have nothing more to add. See you guys tomorrow.
I expect a spirited defense from his admirers.
I have never understood why people take him seriously, or respectfully. I have seen too many bloggers show he distorted what they said.
I admit I expected this was a joke when I started reading it. On the other hand I’m not really surprised, and I ‘ll explain why.
Maybe I am letting my dislike for MY influence me, but I see this as perfectly natural outgrowth of the contempt for what Shaw mocked as middle class morality, fly over country, ‘judeo christian values’, and the great unwashed which dominates the thinking of men like Yglesias. Truth is for little people.
I’m curious Ken B. can you give me two or three of the best (worst) examples of him misrepresenting a blogger? I actually never thought he did that, which is why this post surprised me somewhat.
It’s been too long to recall examples. Glenn Reynolds the Instapundit was one for sure, and I think at least one Volokh conspirator.
I think Armed Liberal too, but it’s like 10 years ago.
Here’s the post that Reynolds cites as Yglesias misrepresenting him : http://www.americanprogress.org/issues/media/news/2004/05/27/793/think-again-the-return-of-the-stab-in-the-back/
Cool, thanks. Yes, Yglesias very clearly misrepresents Reynolds here. What I think most significant is that, as far as I know, he never recanted. He and Reynolds fought for some time and one of MY’s posts was titled “F— you glenn”
Ken I think you are quite wrong on this one. Not that I’m about to defend Yglesias , but your explanation of motives just doesn’t make sense. If the principle is, “truth is for little people” then why does Yglesias encourage other people to lie? Surely he would keep such clever tricks to himself, and only his elite circle could save a buck on soap.
My explanation is quite different. Yglesias believes that government creates morality by writing laws and making regulations. Thus, not buying Obamacare is immoral because he knows the regulators have instructed people to buy Obamacare (regardless of whether a genuine legal mandate exists). On the other hand, the government has not specifically instructed everyone not to game Amazon, so that must be OK.
Yglesias knows that if government ever disappeared then all morality would cease to exist, because only authority can decide right from wrong.
We might not be so far apart on this. He is speaking to his readers, not the great unwashed. His readers are part of the elite.
More importantly he doesn’t think that everyone is entitled to be part of the ruling class. He is but Alaskans Or Texans who attend less prestigious universities and speak with an accent are not. In his mind it is a sad necessity to have to accommodate the large numbers of morlocks Who populate the country. Because they unfortunately have power, it is sometimes necessary to lie to manipulate them. This he feels is justified morally, and note that he doesn’t need a law telling him so. I don’t think he believes anything quite as crude as law creates morality. I think he does believe that the Eloi are allowed to decide all moral questions however.
Indeed. Reminds me of the anecdote about the philosopher (can’t for the life of me remember which) who hosted dinner parties and discussed with all his guests how there was no God, but when his servants were around, he always spoke of God and the importance of being a good Christian.
One of his guests later asked him about this and he essentially said, “Well it’s fine for you and me not to believe in God, but if these people don’t believe in Christian morality, they’d steal from me.”
Obviously Amazon needs to exact revenge on Yglesias by starting a foundation and having him head it up. Nights, weekends, whenever he has time…
I think Yglesias does a lot of good work but I found this very off-putting as well.
I ordered a box of tea from Amazon for $5. They sent me 4 boxes by mistake but the invoice only showed 1 box and my credit card was only billed $5. I contacted Amazon and explained the situation and asked them to charge me an additional $15 for the extra tea they sent me.
Bourgeois sucker!
Yeah, he’s a peach.
https://mobile.twitter.com/mattyglesias/status/21085606729?screen_name=mattyglesias
https://mobile.twitter.com/mattyglesias/status/347062593615187968
I dinged him. Do you follow me on Twitter Ken B.? I’m saucier there.
I almost never go on Twitter. MF’s book length comments wouldn’t fit, and that would be like a day without sunshine.
Note in the first tweet I gave MY answers your title question explicitly.
Brevity is the soul of dimwits.
On the bright side, Yglesias will only be able to get these free benefits for three months, after which he’ll have to pay 79 dollars a month to continue to receive them. Still, I hope Amazon cancels his Amazon Mom membership once they read his post.
You will probably fine there’s small print in the contract when you sign up with Amazon that you agree to them sending the drones around in the event that you are discovered scamming. I would guess that Amazon’s lawyers have more time to write that crap, than anyone else has time to read it.
A year I believe not per month.
Whoops, no. Keshav is wrong and so am I. To continue in mom you need to join prime, and MY stipulates being a member of prime at the top of the article. So I belive no further cost to him.
Mom is available 3 months free to non prime members but the they are primed at 79 a year.
Yglesias said “and there’s no monthly fee”, so maybe he created a new account and signed up for the 3-month free trial of Amzon Mom.
At the top he says this is an option for prime members, who already pay the 79 a year. He was already subscribed to a lot of stuff, and just saw a way to boost his 5% to 20%.
What’s the difference between lying about being a mom and lying about Tom Woods and the ABCT?
Woods, Yglesias declares, is “pushing a fringe economic doctrine that tells the right what it wants to hear so he’s gaining popularity.”
Um, Matthew, what right-wing circles have you traveled in over the years that have “wanted to hear” scathing criticism of the Federal Reserve? How many “right-wing” politicians can you name that have even mentioned the Fed as a political issue over the past, oh, ninety-six years?
But that’s a small point. Much more interesting is Yglesias’ dismissal of Austrian business cycle theory (ABCT) as a “fringe economic doctrine.” Well, according to James Galbraith, maybe 10 or 12 of the country’s roughly 15,000 professional economists predicted the current crisis. (Ol’ Jimmy wasn’t counting hundreds of Austrian economists, natch.) Matt, you sure you want to use the consensus of these geniuses as your bellwether of respectability? Good luck with that.
http://archive.lewrockwell.com/woods/woods113.html
“Well, according to James Galbraith, maybe 10 or 12 of the country’s roughly 15,000 professional economists predicted the current crisis. (Ol’ Jimmy wasn’t counting hundreds of Austrian economists, natch”
“Hundreds of Austrian economists”, my eye.
http://socialdemocracy21stcentury.blogspot.com/2011/12/austrians-predicted-housing-bubble-but.html
If Woods is not lying, then he is deluded/ignorant.
Nor are many prices even performing their Hayekian function, because they are administered prices.
http://socialdemocracy21stcentury.blogspot.com/2013/12/daniel-kuehn-on-austrian-business-cycle.html?showComment=1386352137281#c744494525305779711
So called “administered prices” (a concept I reject) still tell the world the terms of each transaction. Other people still can determine if they think they can produce a similar product for less and make a profit.
LK still does not understand economic calculation and all of his vast critique distorts or dances around this key concept. And I’m fine with that because that’s all he can do.
(1) lol.. what does this have to do with the false claim that “hundreds of Austrian economists” predicted the economic crisis?
(2) and It is you who do not understand Austrian price theory. Your utter ignorance of the vital importance of a flexible wage and price system that at least has a tendency to move towards market clearing levels in Austrian theory is proof you have no idea what you’re talking about.
You are a vulgar and ignorant internet Austrian and that is why nobody need take you seriously.
(3) From your link:
“I smell politically supported big business cartels when I sniff “administered prices”
So they do exist? Or don’t they?
Oh boy, another juvenile back-and-forth about “fixprice” markets and economic calculation. Merry Christmas!
Indeed, but note WHY. Roddis passed on a claim from Woods. A wildly implausible claim actually, since it clearly implies hundreds of professional economists, who are Austrians, predicted the crisis And when LK challenged it Roddis changed topics to his hobby horse.
Dear LK,
Please read Albert Jay Nock: Our Enemy The State. He talks about how the court of public opinion should determine prices, ultimately creating reality. He also explains how this is not how reality is created because the state and their big guns interfere with the is process.
I think you will find your answer to administered prices and gain a more complete overall understanding of the political economy we live with.
Administered prices do exist, heck, half the market is administered and it derives its power from frac inflation. Capital investment is merely an illusion. Most investment is really a social maneuver rather than profitable endeavor driven by the customer.
Lk, You claimed 10 percent YoY inflation = hyperinflation just to slander Austrians. Lying piece of.
LK,
I think Roddis has made your life simpler. He writes:
“So called “administered prices” (a concept I reject) ” as if one’s personal rejection of an idea vitiates it. This is a bit like arguing with a creationist who says “the so-called genetic code (a concept I reject)”. He is clearly not engaging in rational debate here. Point that out, ands reduce your risk of carpel tunnel syndrome.
🙂
Certainly hundreds of people skilled in Austrian economics were aware of the funny money induced housing bubble before it burst. For purposes of changing the subject, we can debate forever whether those people don’t count as “economists” and whether harebrained oblivious Keynesians with PhDs do.
If Richie and Ken B disagree with me that economic calculation is the core principle of Austrian analysis and from which everything else flows, refute me.
If Richie and Ken B disagree with me that no non-Austrian in the galaxy (including MY) appears to understand economic calculation, refute me.
If Richie and Ken B disagree with me that LK does not understand economic calculation and that the central focus of his critique it is never-ending distortion of the concept, refute me.
If Richie and Ken Be disagree with me that Austrians give away far too much in their debates with non-Austrians by failing to engage their opponents’ failure to understand economic calculation, refute me.
But enough of this little girl whining of, “Oh stop fighting so much”.
Oh quit being such a damn Diva. You and the insufferable LK have debated and clogged up the comments on this topic so many freaking times, and usually it’s totally unrelated to Dr. Murphy’s post.
Further, if you don’t agree that LK’s following statement was ludicrous, refute me.
Nor are many prices even performing their Hayekian function, because they are administered prices.
I don’t need to refute you. I pointed out to LK why I thought he was wrong about this. Administering prices cand add noise to the signal and be important in many ways, but it doesn’t eliminate the signal.
Ken B, administered prices do not perform the role Hayek requires, and whatever “signal” is left is trivial compared to what Hayek needs for his theory to work.
if Hayekian prices must communicate vital information
about changes in supply and demand, how can a price generally inflexible with respect to demand do anything like that?
And, Ken B, not to mention the fact that Misesians and Rothbardians do not even accept Hayek’s informational view of prices:
“The price system is not—and praxeologically cannot be—a mechanism for economizing and communicating the knowledge relevant to production plans. The realized prices of history are an accessory of appraisement, the mental operation in which the faculty of understanding is used to assess the quantitative structure of price relationships which corresponds to an anticipated constellation of the economic data. Nor are anticipated future prices tools of knowledge; they are instruments of economic calculation. And economic calculation itself is not the means of acquiring knowledge, but the very prerequisite of rational action within the setting of the social division of labor. It provides individuals, whatever their endowment of knowledge, the indispensable tool for attaining a mental grasp and comparison of the means and ends of social action.” (Salerno 1990: 44).
http://socialdemocracy21stcentury.blogspot.com/2013/03/mises-and-hayek-dehomogenized-note-on.html
I ‘ll bet you I understand more on this subject and read more about it than any number of fools on this blog here like Roddis.
” how can a price generally inflexible with respect to demand do anything like that?”
Because it cannot be permanently inflexible. This is why I say the siignal is attenuated — bits and timing are lost — but it is not completely absent. And the more competitive the industry the less information will be lost as inflexibility will be harder to maintain.
Perfect markets are an abstraction, like point particles or waves. They fit some situations better than others. As real markets diverge from ideal the results of theory will break down more and more. But because a theory doesn’t work in all cases doesn’t mean it works in none. Newton does gravity and ballistics really well most of the time. Sometimes, gps for a good example, you need Einstein.
“This is why I say the siignal is attenuated — bits and timing are lost — but it is not completely absent. And the more competitive the industry the less information will be lost as inflexibility will be harder to maintain.“
You are simply wrong, Ken B.
Markets with high levels of competition still often have administered prices and ones maintained without much influence from demand. These prices do not just become flexible in the way required by Hayek’s theory just because they face competition.
Your average firm “competes” in other ways: advertising, sales promotion, product design, attracting more loyal customers etc.
“You are simply wrong, Ken B.”
I might be subtly wrong, or sophisticated wrong, but not simply
🙂
Anyway even in industries like you mention — cola — you are mistaking the prices charged by one *firm* with those *available to the customer*. I can buy Kroger cola and other firms can move into the market.
If your theory were right tout court we should the same companies at the top of the Fortune 500 decade after decade.
Incidentally MF and Roddis, you can thank me for making *real* arguments against LK by contributing to FIRE.
how can a price generally inflexible with respect to demand do anything like that?
Other people can still determine who is buying at that price and whether or not they or someone else might be able to produce it and sell it profitably. And one can probably determine if the seller has an artificially government subsidy or protection etc…..
The process is not as stilted, formalistic and complicated as you so desperately try to make it.
Ken B:
“Incidentally MF and Roddis, you can thank me for making *real* arguments against LK”
LK used to attempt to engage my arguments directly, but he soon gave up, and has devolved to stiltifying rhetoric and insult since. There is so much less for me to go by. What you are saying is something I’ve gone over with LK more than once, but he has a very short attention span and memory.
I’ll post far more sophisticated arguments than the ones you are posting here (no offense), but the very next day or week LK will be back saying the same errors as if those posts never existed.
I’ve said to LK many times that prices are not actually fixed with respect to demand, including cost plus profit / markup / administered pricing.
LK is only considering the short run, as you also pointed out. A seller cannot permanently charge a price that will incur losses, because he’ll eventually go bankrupt, and some other seller will take control over those scarce resources. THIS is the coordination that LK doesn’t address, because when it gets to bankruptcy, his mind goes into a short circuit haywire, and any semblence of economics goes out the window, and he starts to moralize the issue and insinuate I have moral shortcomings. Then the next day he’s right back at square one, yapping about administered prices once again.
Administered prices do not “add noise” to any “signal”. They are just as important and functional as prices that are established on the basis of direct supply and demand. They provide information.
Prices do not have to be perfectly flexible, and they do not have to instantly adjust, and they do not have to adjust within a certain time frame, before we can say free market prices tend to clear the market.
LK decided to quibble over Roddis saying “hundreds of Austrian economists”. To LK, an Austrian economist must have a PhD and be employed as an economist, writing Austrian papers and books.
But to Roddis, mand myself incidentally, Austrian economists are anyone who DOES Austrian economics and thinks it has something true to say about the world. There are far more than “hundreds” who fit that description. But it doesn’t matter anyway, it’s a stupid point to quibble over.
LK:
“Ken B, administered prices do not perform the role Hayek requires”
Yes, they do. Hayek’s theory of prices is not limited to instantaneous price adjustments. Hayek’s theory of prices recognizes that price adjustments take place over time.
You are fallaciousl imputing a theory to Hayek that does not apply. YOU are the one who believes, incorrectly, that all prices must instantly adjust, or adjust so fast that we might as well say they instantly adjust, in order for free markets to work, for free market theory to be true, and for every Austrian theory to be true.
Austrian theory is based on subjective value theory, not “prices that adjust within 1 week of a change in demand” or whatever.
If an individual decides to ask a price of $500, for a good that will at this exact moment in time only be sold if the price were $400 or lower, such that the good is currently not being exchanged, then this fact, and this fact multiplied by a million or billion, does not in any way shape or form refute a single PRINCIPLE of Austrian theory.
The existence of unsold goods is not enough to refute Austrian theory.
The existence of individuals subjectively valuing a good as better owned, than sold for less than $500 such that $400 is owned instead, is not enough to refute Austrian theory.
Austrian theory is a theory of action. It explains what is going on when an individual does ANYTHING.
If an individual owns a supply of goods, then Austrian theory says that this individual values those goods more than he values the money he could get with the current bid offers he is aware about. That he is incurring costs by virtue of his acting that way. That he is intending to gain by owning the goods instead of the money. All these facts are incontrovertible, albeit modest, which is what Austrian theory is all about: A modest quantity of absolutely certain propositions.
What you are doing, almost every time you post here, is that you are trying to refute Austrian theory by attacking undesirable outcomes of free market activity. Those are two different things. You are tilting at windmills dude.
“But to Roddis, mand myself incidentally, Austrian economists are anyone who DOES Austrian economics and thinks it has something true to say about the world.”
lol.. let’s just re-define the word “economist” to mean any person who has read a few chapters of Mises and has a loud mouth.
M_F outdoes himself.
” Hayek’s theory of prices is not limited to instantaneous price adjustments. “
And now we are back to M_F’s contemptible lies. I did not state or imply that Hayek says prices need to instantaneously adjust.
“LK is only considering the short run, as you also pointed out. A seller cannot permanently charge a price that will incur losses, because he’ll eventually go bankrupt, “
LOL.. As opposed to reducing the price and selling below costs of production? — which is ALSO a recipe for bankruptcy.
Halfwit.
“Prices do not have to be perfectly flexible, and they do not have to instantly adjust, and they do not have to adjust within a certain time frame, before we can say free market prices tend to clear the market.”
So if recovery from a recession in the “unhampered” market takes 20 years, M_F is adamant there is no problem!
Meanwhile here is what an actual Austrian economist says:
Generally speaking, most depressions (or “recessions” as they came to be redefined after the New Deal) in U.S. history were over within two years, and all of them within five ….
Krugman’s “explanation” for the stagnant investment of the 1930s can’t explain why the U.S. economy managed to quickly recover from all of the earlier depression in its history
Robert Murphy, The Politically Incorrect Guide to the Great Depression and the New Deal, pp. 112-113
Of course, we’ll now hear “quickly” can have any meaning M_F gives to it.
It could mean 30, or 40, or 100 years!!
LK:
“lol.. let’s just re-define the word “economist” to mean any person who has read a few chapters of Mises and has a loud mouth.”
So when you misunderstand what someone means, and they tell you where you are misunderstanding the argument, then THEY are at fault because they were not using YOUR definitions.
“Hayek’s theory of prices is not limited to instantaneous price adjustments. “
“And now we are back to M_F’s contemptible lies. I did not state or imply that Hayek says prices need to instantaneously adjust.”
I did not claim anywhere that you did. The fact that prices do not instantly adjust, is implied in Hayek’s theory of prices. That is enough to reject your claim that Hayek’s theory of prices cannot accommodate “fixed prices.”
Prices do not need to instantly adjust for Hayek’s theory of prices to be correct. Since prices do indeed adjust to changes in demand OVER TIME, it follows that your assertion Hayek’s theory is inadequate is on false grounds.
“LK is only considering the short run, as you also pointed out. A seller cannot permanently charge a price that will incur losses, because he’ll eventually go bankrupt, “
“LOL.. As opposed to reducing the price and selling below costs of production?”
That is not “opposed” to what I said. You just restated what I said. Setting a permanent price that will incur losses IS the setting of selling srices below costs.
The argument is that a seller cannot permanently set a price below costs, and survive. At some point he’ll lose ownership over means of production.
Thus, the seller has an incentive to reduce nominal investment spending, which, when combined with other sellers doing the same thing, puts downward pressure on factor prices, and hence costs fall.
“— which is ALSO a recipe for bankruptcy.”
That is why costs fall. To avoid bankruptcy. Costs fall when investment falls. Costs falling and selling prices falling do not cause perpetual losses, nor bankruptcy.
“Prices do not have to be perfectly flexible, and they do not have to instantly adjust, and they do not have to adjust within a certain time frame, before we can say free market prices tend to clear the market.”
“So if recovery from a recession in the “unhampered” market takes 20 years, M_F is adamant there is no problem!”
If it takes 20 years, then that is strong evidence that the government messed the economy up so badly that it is a good thing the free market was allowed to function sooner, rather than later, when it would take even longer.
You have no firm ground to stand on. You have no scientifically derived time frame that justifies violence beyond that time frame. Your position is completely arbitrary. All that matters to you is that violence be used when YOU are not satisfied with how long it takes for individuals to fix their own problems the best way anyone knows how to do.
“Meanwhile here is what an actual Austrian economist says:”
“Generally speaking, most depressions (or “recessions” as they came to be redefined after the New Deal) in U.S. history were over within two years, and all of them within five ….”
History is unique.
“Of course, we’ll now hear “quickly” can have any meaning M_F gives to it.”
Of course, you’ll just keep pretending that free markets will take 20 years as a matter of course, despite the historical record.
“It could mean 30, or 40, or 100 years!!”
Because people can live that long without producing and earning any income.
“So if recovery from a recession in the “unhampered” market takes 20 years, M_F is adamant there is no problem!”
In what world would it take an individual 20 years to figure out what to do with his old car?
In the REAL WORLD, individuals most quickly fix their economic problems in a world where they are not coerced, and where they are not robbed.
If it takes individuals 20 years to fix their problems, then adding governmental coercion would only force them to take more than 20 years, by deceiving them into thinking their choices are optimal in a division of labor, when they are really suboptimal, thus exacerbating the problems.
http://socialdemocracy21stcentury.blogspot.com/2013/05/kirzner-on-hayek-on-prices.html :
“Hayek’s view of the role of prices as communicating economic knowledge is well known.
In a market for any particular commodity, an equilibrium market price equates demand with supply and ensures that there is no excess demand or excess supply (Kirzner 1985: 197). Equilibrium market prices communicate the necessary information to buyers and sellers to achieve economic coordination (Kirzner 1985: 198). In this economic sense, an equilibrium (or market clearing) price is the “right” price. In a general equilibrium, there is perfect communication signalling and economic coordination.
But prices in the real world are virtually always disequilibrium prices, and the general system can never be in a general equilibrium state. Kirzner – like Hayek – conceives the price system as providing a mechanism to progressively improve information and coordination in relation to the past. Disequilibrium prices may communicate incorrect information and result in waste, but their movement towards equilibrium values permits a “discovery” process by market participants to generate greater economic coordination (Kirzner 1985: 205).
———
This is exactly how Israel M. Kirzner (1985. “Prices, the Communication of Knowledge, and the Discovery Process,” in Kurt R. Leube and Albert H. Zlabinger (eds.), The Political Economy of Freedom: Essays in Honor of F.A. Hayek. Philosophia Verlag, Munich. 193–206) understands Hayekian price communication theory, as I noted months ago in my summary of this paper and why it is wrong with respect to administered prices.
I expect we’ll now hear insane nonsense from Roddis that Kirzner never said any such thing — or that Kirzner doesn’t understand “economic calculation”,
Or perhaps Kirzner was a “socialist”.
I don’t seem to have access to that Kirzner article or that Leube & Zlabinger book. Buy me a new one for only $216.
http://www.amazon.com/Political-Economy-Freedom-F-international/dp/3884050575
I note that your Kirzner quote begins with your usual distortion:
LK: That is, in an uncoordinated or relatively uncoordinated economy, a flexible price system in which market buyers and sellers move prices in trades towards their market-clearing values will
Kirzner: “generate systemic changes in market decisions about price offers and bids, in a way that, by responding to the regrettable results of initially uncoordinated sets of decisions, tends to replace them by less uncoordinated sets” (Kirzner 1985: 198).
There isn’t any distortion.
Kirzner is talking of disequilibrium prices moving towards “less false” values by moving towards market clearing levels.
You’re too thick to understand what he’s saying.
“If Richie and Ken B disagree with me that LK does not understand economic calculation and that the central focus of his critique it is never-ending distortion of the concept,”
On the contrary, it is roddis who does not understand that topic.
As I noted here a long time ago with direct quotes from Mises, economic calculation is as follows:
(1) The primary purpose of prices in Misesian economic calculation is to enable calculation of profit and loss. And every economist understands this concept.
(2) present prices or prices of the immediate past of factor inputs are the basis for monetary calculation.
(3) “For the sake of economic calculation all that is needed is to avoid great and abrupt fluctuations in the supply of money. Gold and, up to the middle of the nineteenth century, silver served very well all the purposes of economic calculation. Changes in the relation between the supply of and the demand for the precious metals and the resulting alterations in purchasing power went on so slowly that the entrepreneur’s economic calculation could disregard them without going too far afield. .”
That is: Mises says that economic calculation can occur as long as “great and abrupt” shocks to the money supply do not happen.
(3) and — in Austrian theory — economic calculation is assisted by a flexible price and wage system that allows prices/wages to move towards market clearing levels, so that there is a tendency towards supply and demand equilibrium in product markets, even if the whole economy never reaches Mises’s “final state of rest”.
This factor (3) is also the primary mechanism for Mises’s idea of economic coordination.
——
If Roddis disputes any of this, let him do so — or shut his stupid mouth in his absurd claims that I do not understand Mises’s theory of economic calculation.
Roddis is a broken record player — with an IQ of the same level.
(1) That isn’t economic calculation. That is the purpose of prices WITHING economic calculation.
(2) Correct.
(3) Mises wrote, which you did not quote, is this:
“What economic calculation requires [p. 224] is a monetary system whose functioning is not sabotaged by government interference.”
You’re quoting Mises in order to refute Roddis, and yet you can’t even see that YOU support the very thing that makes economic calculation impossible. Don’t you find that ironic?
More from Mises:
“The endeavors to expand the quantity of money in circulation either in order to increase the government’s capacity to spend or in order to bring about a temporary lowering of the rate of interest disintegrate all currency matters and derange economic calculation. The first aim of monetary policy must be to prevent governments from embarking upon inflation and from creating conditions which encourage credit expansion on the part of banks. But this program is very different from the confused and self-contradictory program of stabilizing purchasing power.”
The quote you cited, about “the sake of economic calculation”, means what makes any calculation possible. No abrupt changes is the minimum. But there are still distortions from government interferring with money. That causes the business cycle, even though economic calculation is still being made on the basis of no ABRUPT changes (e.g. immediate 80% deflation one day, followed by 80% inflation the next, etc)
(1) ” That isn’t economic calculation. That is the purpose of prices WITHING economic calculation.”
??
(2) Roddis claims no non-Austrian in human history has ever understand “economic calculation” He is wrong.
(3) you’re too thick to realise I can describe Mises’s arguments or ideas without agreeing with them.
(1) The purpose of prices is not economic calculation itself.
(2) Actually, he’s not wrong. It is true that no non-Austrian understands it, because the only way to understand it, is to understand and accept Austrian epistemology, which by definition non-Austrians reject.
(3) You’re not correctly describing economic calculation. You’re just posting quotes and fallaciously calling that economic calculation. You remain ignorant.
My prior responses to the “administered prices” nonsense:
http://consultingbyrpm.com/blog/2013/10/outrage-over-outrage-over-government-shutdown-im-starting-with-the-man-in-the-mirror.html#comment-75073
MY: Bored by the proceedings at the Republican National Convention in St. Paul one day in 2008, I decided to try to gather some color down the road in Minneapolis, where Ron Paul and fellow dissident conservatives and libertarians were holding a counter-convention at the Target Center. At one point a speaker thundered that Barack Obama and John McCain “both have a lot to learn about Austrian business-cycle theory.” The crowd went delirious with cheers, and soon chants of “end the Fed” echoed throughout the arena.
It was funny at the time. A bunch of cranks talking about their crank monetary theories and espousing a crank prescription.
http://www.lewrockwell.com/2011/03/thomas-woods/a-rebuke-from-the-hive/
You’re trying to make me like Yglesias aren’t you?
I’m not trying to make you do anything. I don’t really give you much thought. Perhaps others enjoy a professional hair splitter.
The last line is interesting: “Even if you have a real baby, a fake one might be better if you don’t want too many targeted deals.”
If you use a fake baby you will receive the same number of offers, but they will be less well targeted. Why would it be preferable to receive less well targeted offers? Perhaps it is because you think you would over-purchase if offered well targeted deals. This is not impossible, it is recognized that people do respond to 99c prices and half price offers etc and thus could be said to over purchase in response to offers. To prefer less well targeted offers suggests a high level of either self awareness or paranoia.
The objection to targeted advertising has always mystified me. It seems to come from both the right and the left, and they’re both insane.
Targeted advertising is, in every POSSIBLE way, better than non-targeted advertising. I guess it might be reasonable to be paranoid that if the NSA is monitoring your amazon purchases and notices you buying a lot of Rothbard books, you might be targeted by the government, but they’re going to do that regardless of whether you put yourself on a fancy “do not track” list or not…
Within the next 10 years, I think we’re going to have a generation of young boys who have never seen commercials for tampons. We will all bore our grandchildren with stories of how, in the old days, companies just had to show ONE commercial at a specific time to EVERYONE who was watching a specific program and just hope that some of the people watching were interested in the product. We’re very close to non-targeted advertising being as obsolete as the rotary phone, and that will be a glorious achievement of the market, worthy of celebration.
Brad DeLong:
http://delong.typepad.com/sdj/2010/03/person-to-stay-far-far-away-from-1-oh-boy-mario-rizzo-sure-is-crazy-march-24-2010.html
DeLong was referring to Mario Rizzo here, but since DeLong is fair and balanced, I am sure these comments would apply equally to Matt Yglesias.
Heh. Funny you should post that. I was going to write a comment about how Yglesias seems to me like all the smug nastiness of Brad DeLong’s blog, without any of the actual economic knowledge.
It is kind of hilarious to submit Matt Yglesias to inexpert psychoanalysis by Dr Brad “Backyard-chop-chop” DeLong but despite the poetry of it, I’m just not cruel enough to support such a thing.
There’s some places better not to go there.
Strongly agree. I may not think much of complex moral codes that are just trumped up tribalism, but it bothers me when people jettison basic codes of honor like don’t lie, cheat, or steal. I’ll only mention his name because he’s been so open about it, but this is the sort of thing that REALLY bugged me about Jonathan’s selling essays to other college students.
OUR Jonathan, posts here Jonathan?
Oh yeah I forgot about that Daniel! (Selling papers.) Yeah that bothered me too. Full disclosure: In high school I wrote a paper for my friend but I don’t know what I was thinking.
It would violate the Christmas spirit for me to do a post quoting Yglesias on lying to Amazon and then DeLong about what a psychopath he must be. But very good catch.
Since we’re confessing: In music class, eacf of us played our final exam for the teacher. This girl in the class, who I kinda liked, was scared she would fail. It just so happened that when it was her turn, the teacher took a little stroll to the other side of the class.
I gave the girl the nod and motiioning my instrument signalling that I would play for her, then proceeded to play. She passed the class. We dated in high school for a few years.
These days, motioning your instrument in class would probably get you suspended…
I may not think much of complex moral codes that are just trumped up tribalism
I’m very curious about what moral codes you are referring to.
So am I. But Leviticus comes to mind, as do many religious strictures of many religions. If you base your morality on a book of fairy tales of the lives of a perfect man from the remote past I’d say you qualify. That’s most of the world.
oops Pluralisation problem. I don’t mean to exclude a religion whose perfect man led only one life.
Pick any jealous God, there’s a number of them going around.
Hmmm, I think that’s a slightly different matter.
The person typing the paper and selling it is not committing fraud. He is not lying, cheating, or stealing. He is performing a simple, voluntary transaction. That his customer uses the products of the transaction to lie, cheat, or steal, is another concern entirely.
It’s like blaming the owner of the gun shop when a mass shooting happens.
But do you think we could blame the owner of a gun shop if he knew full well that the customer would go on a shooting rampage? That’s the relevant analogue.
Actually I think a better analogy would if the gunsmith made the killer a special gun, form fitted to his outfit to be easy to hide and from a special polymer to evade any metal detectors, knowing he was going to shoot up the airport. These were one assumes bespoke essays. That matters not at all except to remove any pausible deniability.
It’s collusion not commerce.
I guess that’s a fair point. At the same time, there’s a matter of degree. Enabling mass murder and enabling someone to cheat at college are a bit different in that respect.
How about the analogy of being the “other man” in an extra-marital affair? My belief has always been that the “other man” has no culpability at all (assuming he’s single). He’s not breaking any wedding vows. At the same time, he’s certainly colluding with someone to do so.
Bzzt. He is Almost certainly keeping it a secret, and willing to lie if need be.
He is also more than colluding he’s making the offense possible. A dildo is not infidelity. Is depending on the culture almost certainly violating the norm. I understand that because libertarians think that that should not be a legal they also therefore want to think that it should not be considered immoral but that does not follow. Part of the damage of infidelity is a strange, and he is amping that up. Finally he is indubitably treating the husband with disrespect.
Ken B,
Are you sure you’re not a Rothbardian? I think both Rothbard and Hoppe would have agreed with you.
“Libertarianism as developed in The Ethics of Liberty was no more
and no less than a political philosophy. It provided an answer to the question of which actions are lawful and hence may not be legitimately threatened with physical violence, and which actions are unlawful and may be so punished. It did not say anything with respect to the further question whether or not all lawful actions should be equally tolerated or possibly punished by means other than-and below the threshold of-a threat of physical violence, such as public disapprobation, ostracism, exclusion,
and expulsion” – HHH in the Introduction to The Ethics of Liberty
“It is not the intention of this book to expound or defend at length the
philosophy of natural law, or to elaborate a natural-law ethic for the
personal morality of man. The intention is to set forth a social ethic of liberty, i.e., to elaborate that subset of the natural law that develops the concept of natural rights, and that deals with the proper sphere of “politics,” i.e., with violence and nonviolence as modes of interpersonal relations. In short, to set forth a political philosophy of liberty.” – Murray Rothbard, The Ethics of Liberty
I was referring to this statement. ‘
Ken B: I understand that because libertarians think that that should not be a legal they also therefore want to think that it should not be considered immoral but that does not follow.
re: “It’s like blaming the owner of the gun shop when a mass shooting happens.”
No – it’s really, really not.
The purpose of a gun is not to do mass shootings. The whole point of selling a paper is to enable cheating.
“The purpose of a gun is not to do mass shootings. ”
The purpose of buying a gun depends on the purposeful behavior of the gun buyer. That includes protection, targeting killing, and yes, even mass shootings.
It’s not true that only machine guns are intended for mass shootings. It depends on the intentions of the buyer.
>, but it bothers me when people jettison basic codes of honor like don’t lie, cheat, or steal.
Those are just as much trumped up tribalism as any other moral code you can think of.
Those codes are tribal as well, but because they work in a variety of social contexts. I don’t see how they’re trumped up and I don’t see how they’re uniquely tribal. Can you explain?
I like Matt, but my reaction to this post was similar to Bob’s.
MSNBC The Cycle co-host Toure Neblett justified lying to take advantage of the discount, saying “nobody was getting hurt here.”
http://pjmedia.com/eddriscoll/2013/12/19/toure-lying-ok/
A natural inference then, and I think this is part of the idea, is that you can lie to get better price on health insurance and it’s OK.
Corporations aren’t people according to the left, so the fact that “nobody” is getting hurt is absolutely correct by their own definitions. In fact, most corporations are evil exploiters, and surely taking advantage of them is actually providing a great net social benefit.
On the other hand, “we are the government” so cheating IT is obviously immoral, wrong, and would make you a pariah…
Amazon is ok with it:
http://www.slate.com/blogs/moneybox/2013/12/18/amazon_mom_fake_babies_it_s_okay_with_amazon.html
In light of this Bob I think you really SHOULD write your DeLong post. Because clearly you can convince people that what MY urged was just hunky dory after all.
A journalist sells only one of two things: integrity or the lack of it. We now know which Yglesias is peddling.
The most revealing part of the essay is Iglesias’s comment that if Amazon really cared about keeping theft down they would implement more elaborate security. But reveals a belief he’s entitled to do whatever you can get away with. I guess if I were his neighbor I would need deadbolts.
“When I explained earlier this week that you don’t need a real baby to get Amazon Mom discounts, I really never thought I’d end up at the receiving end of a lot of dim-witted faux-populist moralistic outrage since I think it’s pretty clear that Amazon is a sophisticated firm that’s perfectly capable of coming up with a better verification process if it really meant to limit the program to authentic parents.”
Because disliking lying is more horrible than lying.
Even worse. Maybe Amazon just doesn’t want to make the moms that it’s aiming for feel that they they are distrusted. Iglesias sees no problem with eroding trust, even really mocking those who rely upon it.
I hope that Amazon, despite smiling and encouraging him in public, has, behind the scenes, instructed its coders to just bombard him with targeted ads for diapers and other such things.
That’s exactly what he’s doing – taking advantage of the honor system. I still think the basis for this is corporation-hating though. Out in the country near where I live, there are plenty of farmers who sell their products, eggs, flowers, etc, out of “self-serve” booths near their driveways. They employ the honor system. Someone like Yglesias could easily drive up, take a dozen eggs, and leave no money behind in the jar. Would he think this is okay because “If they really cared, they’d hire someone to man the booth and ensure nobody steals?” I mean he’s technically right, they could require more verification, but that would require them to create a new system, which costs money.
Abusing the honor system and then mocking those who obey it is just sick, and something he’d never dream of doing to an individual. But since it’s a corporation, it’s all okay, because “nobody” is hurt.
So Matt M, if you resell me the diapers you got cheap with your fake kid I named, am I as guiltless as your other man?
I benefit from your betrayal, I provide an incentive, I almost certainly keep your secret. But I don’t actually make your misbehavior possible. So it seems I ought to be less blameworthy.
Given that you believe that secrets are immoral, I’m just getting in early asking where you have published your Internet banking details.
Not that I’d use them for anything, you understand *wink*.
I understand that claiming an imaginary child can save you a good deal on taxes, as well. I’m sure Yglesias would have no trouble with that.
I’m going to wade briefly into the Lord Keynes major Freedom spat. When prices can take a long time to adjust. Then the subsequent adjustment may miss other factors which would have moved the equilibrium had prices adjusted instantaneously. This corresponds to a loss of information, a loss of bits. So major freedom is simply wrong to say that the signal is not attenuated and information is not lost.
However LK is wrong to say that because prices are managed they are no longer a channel for information transfer. For example declining ROI can lead to resources being shifted to other purposes. This corresponds to a transmission of and action based upon information as Hayek meant it. Even lossy and noisy channels can do a pretty decent job of transmitting information. Even in the digital age telephone voice transmissions are lossy and noisy.
Gentlemen, resume.
However LK is wrong to say that because prices are managed they are no longer a channel for information transfer. “
Ken B, I am not saying administered prices contain no information at all. Just not the required level of information as posited by Hayek.
You are also missing the key point: Misesian economic coordination of resources — meaning a tendency towards full use of resources via flexible prices tending to clear markets — cannot be occurring in administered price markets. The response to a demand fall is production and employment cuts
The response to demand increase is production and employment increases.
This is why the Keynesian view that aggregate demand drives production and employment is correct, since these markets account for a majority of product markets.
i>The response to a demand fall is production and employment cuts The response to demand increase is production and employment increases.
That’s essential information to everyone that the amount produced at those prices will not clear the market. The manufacturer falsely assumed that the public had more desire to purchase or more income than was previously believed. Those false assumptions can now be corrected by cutting production, if that is the best option of the manufacturer. Again, you must dishonestly strip the price away from the complete transaction or lack thereof, including what was being made, who and where were the targeted purchasers, etc…..
Just the same old same old distortions and nonsense used to create a broken mental Rube Goldberg machine that allegedly requires funny money and unpayable debt to repair.
This was supposed to be a quote:
The response to a demand fall is production and employment cuts. The response to demand increase is production and employment increases.
I am not arguing the Mises view is correct. I am arguing against your assertion that central planning of markets is easily possible. As I stated earlier Hayek’s (and many others) point about prices providing information shows central planning cannot keep up. All that argument requires is that places carry both incentives and information.
I am not arguing ABCT. Your contention is saltation and stickiness in managed Price Markets refutes that argument. Since the information loss is only partial does not.
Ken B:
So do you agree or disagree that the problematic prices are the prices distorted by artificial credit expansion and Keynesian policies?
An artificial increase in “aggregate demand” is by definition a temporary subsidy and those purchases would not have been made but for the temporary demand subsidy. What useful information is transmitted by those prices about the actual preferences of the temporarily subsidized purchasers?
“Misesian economic coordination of resources — meaning a tendency towards full use of resources via flexible prices tending to clear markets — cannot be occurring in administered price markets. The response to a demand fall is production and employment cuts”
“Full use of resources” is not the full story what economic coordination means, although it’s the only thing that Keynes was concerned about. Economic coordination also means utilising resources in a manner that reflects the relative scarcities of different factors of production and the preference of consumers for different goods.
This type of coordination obviously doesn’t require instantaneous price changes, as we don’t see massive shortages or surpluses of consumers goods in capitalist economies, as was the case in centrally planned economies with genuine “administered prices”. Prices set by a private business can never be “administered” in that sense because a business needs to avoid going bankrupt, something which would be impossible if its prices did not respond to market forces. The prices charged by a business always reflect its assessment of commercial realities, whether it keeps them stable or it changes them.
Price stickiness, i.e. prices that do not instantly adjust to changes in supply and demand, are not sufficient to refuting ABCT.
MY clearly thinks defrauding the IRS is perfectly acceptable behavior and in accordance with the wishes of the US government, because it “is a sophisticated firm that’s perfectly capable of coming up with a better verification process if it really meant to limit the program to” honest taxpayers.
Eek. Don’t give any democrat the idea we need MORE scrutiny.
That’s fair. But, then, that is the point, no? I don’t want an anal probe for buying my kids soap, either.
Good way of showing that person’s hypocrisy.
[…] promise you guys, I was going to let this go. I said my piece about Yglesias’ “go ahead and lie about having a fake kid, it gives you money” […]