Potpourri
==> David R. Henderson gives a comprehensive response (with the help of Scott Horton) to Richard Epstein’s case for a libertarian intervention against ISIS.
==> Speaking of Syria, check out my old post on “More Middle East Map Fun!”
==> Robin Hanson has an interesting post that suggests economists don’t actually care about changing the world. (HT2 Art Carden)
==> Ed Feser complains that no deep theist has ever advanced the argument that “everything must have a cause,” and yet atheists keep knocking it down with triumph.
==> Speaking of deep thinkers, Neil deGrasse Tyson is remarkably flippant about his made-up quotes, and so are his fans.
==> Can this be possible? A teenager gets 23 years in prison for shooting a dog (when he was 16) after breaking into a house?
==> It looks like Krugman is going to debate someone after all.
It’s pretty clear that the U.S. won the 2003-11 Iraq War. There’s no reason it can’t do so again against an enemy [the Islamic State] more centralized and despised than Saddam’s government. It would be pretty easy for the Obama administration to liberate Raqqa and Nineveh in three days if it wanted to do so. It’s pretty clear that the Obama administration, despite all words to the contrary, has no intention to “destroy” the Islamic State within the next nine months. I have no idea why it’s doing all these random airstrikes on Islamic State territory, but it certainly is not to degrade the Islamic State’s capabilities. Perhaps Obama’s goals in throwing a bunch of equivalents of holiday firecrackers at random Islamic State targets are political in nature, and are meant to increase the domestic bargaining power of himself and the Democrats in Congress. Can anyone come up with a better explanation for the firecracker equivalents?
I’d like to know your definition of “won” and it is also interesting that we can bound wars by such specific dates!
Wikipedia says that’s when it happened. The last month of the GWB presidency had fewer Iraqi civilian deaths from violence than at any point prior to that month and after the beginning of major combat operations in Iraq in 2003.
iraqbodycount.org/database/
According to the retired General Jack Keane,
againstjebelallawz.wordpress.com/2014/07/17/the-congressional-hearing-on-the-rise-of-isis/
So the Iraq war was won on George W. Bush’s watch. This victory was continued under Obama’s watch. It ended with the proclamation of the ISIS in the first half of 2013.
I don’t know of too many people who would regard the Iraq war as “won.” It is arguably the largest US foreign policy disaster of the last century if not longer. You could argue that it’s not so bad as all that, but I think “won” is a little farfetched. There is no operational democracy there, and in fact there is no long any “there” there, just several warring regions.
I also don’t think most military experts believe the US could easily destroy ISIS or that putting large numbers of ground troops in Iraq and Syria wouldn’t make the security situation vastly worse in the long run, as it has in Iraq and to some degree Afghanistan. Obama’s strategy appears to be to prevent ISIS from genocidal activity, from taking land in the Kurdish region of Iraq, or overrunning it’s capital, and then hopefully to allow indigenous ground forces in combination with American and other air power to eventually degrade ISIS’s infrastructure. This bears some very limited resemblance to his campaign against Al Queda, which has been fairly successful. You could disagree with him (and plenty do), but I don’t think the strategy suggests some type of political conspiracy.
This is a whole bunch of hooey. Remember Gaddafi’s Libya after February 17, 2011. Now look at the Islamic State today. One is much weaker, has far fewer men under its command, and has much less ammunition, cash, and petroleum. One also borders a NATO ally of the United States and has its capital fifty-one miles from that border. And that one isn’t Libya.
John, do you remember January of this year? Syrian rebels had just entered the ISIS capital and the Iraqi Army had just entered Fallujah. Wasn’t this the perfect time for America to crush the ISIS like a bug with minimal effort? And, yet, what happened?
This doesn’t just suggest a conspiracy. The only serious question should be whether the Islamic State is directly taking orders from the White House. Indeed, I was trying to persuade a Pakistani-American friend of mine that the U.S. was supporting the ISIS in Syria less than a week prior to its capture of Mosul.
Charitably granting all of your premises, we should consider to what extent ISIS is a puppet-like punching bag for the USA. Long con motivations could include:
1. Sowing regional discord to prevent non-USA hegemony.
2. Whipping up anti-Islam fervor at home and abroad
3. Distracting from domestic policy
4. Maintaining of a facade of military incompetence so as not to alarm and unite non-allies
5. Diplomacy via other means is more sophisticated than declaration and prosecution of outright war
6. Keep the oil flowing
7. Ensuring that non-governmental American interests abroad win at the expense of American and foreign citizens
I’m just spitballing. Some of these don’t make sense on their own.
I think the first two (especially the second) are unlikely, but I don’t know about the rest.
” A teenager gets 23 years in prison for shooting a dog (when he was 16) after breaking into a house?”
If someone broke into my house and shot my dog – I’m not sure I’d be too sorry to see that person going to jail for 23 years – and I am something of a soft-hearted liberal when it comes to justice.
It it was my wife though….. (j/k)
IF it was my wife though….. (j/k)
Plenty of cases where police have broken into houses and shot people’s dogs… with significantly lighter punishment. Almost like two different classes of people, or something.
Didn’t Steve Landsburg have a post recently about how when the police break into people’s houses and shoot their dogs it’s quite often justified ?
I think Chris Hernandez highlighted a number of cases where unarmed dogs had bitten police officers to death so their killing was unavoidable.
There was actually a case where a dog in my town picked up a gun and started firing at them. They had no choice but to shoot him.
-Bob, as you should well know by now, most theists (indeed, most people) aren’t deep. So our knocking the nonsensical argument down with triumph does serve a good purpose.
Have you got to the bottom of most people
Nope.
I would listen to Tom Woods interview Scott Horton on the idiocy of the US attacking ISIS.
http://www.schiffradio.com/f/Tom-Woods
I would listen to Scott Horton interviewing Michael Scheuer on the idiocy of the US attacking ISIS.
http://scotthorton.org/interviews/2014/09/18/091814-michael-scheuer/
Bob, good interview but the one critical thinking ing they miss factoring in is the petrodollar standard. The PTB go bat sh$t crazy when it is threatened. It’s futile as the sun is setting on it anyway.
How The West Created ISIS
… with a little help from our friends.
http://www.lewrockwell.com/2014/09/no_author/how-the-west-created-isis/
This thesis is plausible-sounding, but requires some direct corroborative evidence for confirmation..
The Tower Of Babel Comes To Paris: The Folly Of Obama’s “War” On ISIS by David Stockman
http://davidstockmanscontracorner.com/the-tower-of-babel-comes-to-paris-the-folly-of-obamas-war-on-isis/
I wanted to like the NDT bit, because I missed the boat on him and find the fanaticism a little disturbing. But it seems very shrill and overblown. While Davis is right that the “below average” slide is technically unclear, he should understand that these talks are closer to Toastmasters than lectures, by design. He is absolutely pandering to his audience and perhaps fluffing himself up. Frankly, I doubt Tyson would include these anecdotes in a hypothetical TED talk. Would he, I would grant more of Davis’s critique.
And getting in a huff about What Quotes Mean To A Journalist is way off the mark. The quotes are so obviously merely illustrative, deliberately not attributed to any individual or organization, one almost gets the sense Tyson is drawing a cartoon, not recounting history. The horrors! Tired trope, surely. Apocryphal anecdote, perhaps. Fictional encounter, so what? I can’t help but snicker when J. Random Journalist is all “NDT is a liar and a bad journalist and a bad statistics lecturer”. See what I did there?
Maybe Davis has some mirror critique where he is holding Tyson to the harsh light of Journalism the way Tyson does to journalists with Science (or whatever). If so, the character assassination bits remove both credibility and impact. It seems like Davis has an axe to grind.
Sorry, “He (Tyson) is absolutely pandering …”
Rick Hull OK you’re right, the specific piece I linked (and even the one it links back to) don’t really give clearly fraudulent things. Try this one. Assuming the guy is right, and Tyson is referring to the 2003 Bush speech, then it is incredibly dishonest. Plus the jury duty story, also explained in that post.
Agreed, the GWB quote is worse, at least as presented, though perhaps Tyson really is referring to a real 2001 quote. Davis doesn’t make clear how he establishes the non-existence of the 2001 quote, but let’s grant it. Clearly Tyson should not be inventing incidents regarding specific entities.
I’m curious if Davis has reached out to Tyson (across any smoldering timbers) for the source of the quote. If he has, preferably before going public with his accusations, and Tyson declined to provide, then Davis is on solid journalistic ground. After all, Tyson would be better equipped and far more motivated to track it down.
Analyzing the 2003 quote in its place is potentially charitable by Davis. But he just uses that to beat Tyson up, claiming how it really doesn’t match at all.
The concluding bit, repeating What Quotes Mean To A Journalist, would have more weight if Davis establishes the context for Tyson’s claims. Is Tyson “on the record”, establishing truth, like he might be in a physics or statistics lecture or in testimony to legal authorities or reporting on a specific event? Or is he providing science-lite edutainment to audiences that aren’t even taking notes?
It would be nice if Davis acknowledged the various contexts and corresponding standards for what may be permissibly stated. Giving Davis the benefit of the doubt, Tyson is in the wrong, and I think less of him for treating real people as straw men to cheaply burnish science (over other occupations) and his own stature.
But this:
> These are normally the types of errors that would be uncovered by peer review. Blatant data fabrication, after all, is the cardinal sin of scientific publishing. In journalism, this would get you fired. In Tyson’s world, it got him his own television show. Where are Tyson’s peers, and why is no one reviewing his assertions?
makes me think less of Davis. Is Tyson addressing his peers with these gaffes?
What?!? A good (excellent) Austrian like Dr. Murphy should be debating Krugman. Does Moore know anything about Austrian economics? I thought that Murphy and Skousen were friendly, why didn’t Skousen push Murphy for this debate?
Senyoreconomist
Krugman doesn’t know the first thing about Austrian concepts or analysis. He will never debate an Austrian.
Do we know this is true? Krugman is a professional economist, or had been for many years, as well as a highly respected academic whose work was of sufficient prominence in the profession that he was awarded the Nobel Prize, probably the most prestigious private award in the world. I realize and accept that he may be wrong about just about everything he thinks, but frankly when I keep reading that neither he not any other professional economist academic knows anything about Austrian economics, I’m left stumped as to how that could possibly be. I have a profession. I am a very orthodox standardized practitioner of it. I am no academic. But I am still fairly familiar with some of the heterodox ideas in my line of work, and for goodness sake, I’m hardly a teacher of the field. I just don’t understand how it can be that no one in the profession who teaches economics understands a school of thought for which one of its founders was also awarded a Nobel prize.
My position is that no Keynesian anywhere seems to understand the concepts of price as information, economic calculation, economic miscalculation and Cantillon Effects as propounded by Austrian analysis and applied to Keynesian policies and policies of artificial credit creation.
If you disagree, find a person who has this understanding and show us what they know. Yapping about incorrect 2009 CPI predictions is a sure bet that the yapper hasn’t a clue.
Krugman’s pronouncements on economics are about as connected to truth and reality as are O’Reilly’s endless lies about foreign policy.
https://www.facebook.com/photo.php?fbid=10154550490495411&l=1c45c27090
“No Keynesian anywhere seems to understand … Cantillon Effects”, and yet it was the **non-Austrian** Mark Blaug who coined the expression “Cantillon Effects” and gave a famous statement of the concept in Economic Theory in Retrospect (5th edn) Cambridge (3rd edn. 1978).
Roddis says no non-Austrian understands the idea of prices as information, and yet Hayek’s paper “The Use of Knowledge in Society” was named — as roddis himself endless points out – by the “American Economic Review” as of its “top 20 articles of the last 100 years”.
More ignorance from Roddis.
Not a refutation.
One group of people putting a medal on a paper does not prove that anyone today understands it.
Yeah, M_F, Hayek’s paper is one of the most cited papers in the “American Economic Review” stats, and as Gene points out the paper’s ideas are taught in microeconomics courses everywhere, but no non-Austrian in human history has ever understood it.
You are peddling nonsense.
Not a refutation.
It is well known in academia that cited papers are often not even read by the authors citing them, let alone understood by them.
Citations are not sufficient evidence that the people citing understand what it is they are citing. They may understand it, but the citations alone are not sufficient.
Geez your claims are so incredibly weak. You grasp at the worst of straws to justify your gobbledygook.
So now you know by telepathy do you that every time that Hayek’s paper has been “cited” by a non -Austrian it was never read and his ideas never understood? lol….
Major problems here: because the whole disciple of “information economics” – by people like Joseph Stiglitz, George Akerlof, and Michael Spence – takes Hayek’s articles on information as one of its foundations. They discuss Hayek’s idea THOROUGHLY.
You need only read Joseph Stiglitz’s paper “The Contributions of the Economics of Information to Twentieth Century Economics,” Quarterly Journal of Economics 115.4 (2000): 1441–1478, to see this.
Epic and embarrassing fail, M_F.
“Much of the literature in information economics was originally inspired by Friedrich Hayek’s “The Use of Knowledge in Society” on the uses of the price mechanism in allowing information decentralization to order the effective use of resources. Although Hayek’s work was intended to discredit the effectiveness of central planning agencies over a free market system, his proposal that price mechanisms communicate information about scarcity of goods inspired Abba Lerner, Tjalling Koopmans, Leonid Hurwicz, George Stigler and others to further develop the field of information economics”
http://en.wikipedia.org/wiki/Information_economics#Information.2C_the_price_mechanism_and_organizations
According to M_F no non-Austrian in human history ever read it or understood Hayek’s article!! lol
Look LK, it is clear that no Austrian understands it, because if they did they would *be* an Austrian.
That is an absurd argument. Even if Hayek’s views on information and prices are right, it does not follow that the rest of Austrian economic theories are right, nor that just because you accept Hayek’s views, then you must be an Austrian.
E.g., Post Keynesians think that money is never neutral. Austrian agree with this.
Does that mean that no Austrians understand neutral money, because if they did they would *be* a Post Keynesians? lol.
Yes, it was meant tongue in cheek. Should have used an emoticon or something perhaps. Also should have read no non Austrian.
LK:
“So now you know by telepathy do you that every time that Hayek’s paper has been “cited” by a non -Austrian it was never read and his ideas never understood?”
That is a gross exaggeration of what I said. I clearly did not imply “every time” nor “never understood.”
You are the one inferring telepathy for yourself when you implied that citing Hayek is sufficient grounds to claim the author understands.
I am just saying your “evidence” is pathetic, so to speak.
“…the whole disciple of “information economics” – by people like Joseph Stiglitz, George Akerlof, and Michael Spence – takes Hayek’s articles on information as one of its foundations. They discuss Hayek’s idea THOROUGHLY.”
Not in the paper you cited.
“Although Hayek’s work was intended to discredit the effectiveness of central planning agencies over a free market system, his proposal that price mechanisms communicate information about scarcity of goods inspired Abba Lerner, Tjalling Koopmans, Leonid Hurwicz, George Stigler and others to further develop the field of information economics”
…further “develop” it so as to rescue statism from the wreckage you mean.
“According to M_F no non-Austrian in human history ever read it or understood Hayek’s article!!”
Straw man. Yay.
That is exactly what you imply, M_F: that despite being frequently cited and discussed, no non-Austrian understands the Hayek’s paper.
Your view is laughable nonsense.
LK, Bob was talking about Krugman, I see no reason whatever that any of his statements in this regard should be held to any standard of precision. If all of Bob’s statements were contradictions then he would be at least on par with Lord Keynes himself.
And note how Gene Callahan already corrected roddis by pointing that “dispersed knowledge is now standardly included in micro textbooks”, and roddis even seemed to concede that the theory is known in mainstream economic theory, but roddis is too ignorant or dishonest to do anything but repeat the same discredited nonsense.
Dispersed knowledge is not “standard”.
There are occasional mentions of distributed knowledge, which are models that presume a person knows what everyone collectively knows. If any model concerning knowledge is standard today, they are macro models, and they assume equivalent knowledge among all agents, i.e. rational expectations.
Deliberate misrepresentation of what Gene said is a sign of your desperation.
Gene said that “The problem of limited and dispersed knowledge is now standardly included in micro textbooks”.
The fact that many mainstream neoclassicals use rational expectations does not refute Gene’s statement.
Mainstream economists use rational expectations because they don’t understand dispersed knowledge.
Dispersed knowledge is often “included” in MACRO textbooks, but that doesn’t mean the authors understand how to integrate it into their ideas, or how to understand markets. They usually just make passing references to it, against what they understand (state control) so as to appear impartial and knowledgeable of a “debate” or “opposing views.” You can tell they don’t understand it when they recommend state policies and fail to even argue how it solves or is immune from the theory of dispersed knowledge.
An author who does understand dispersed knowledge would show it, and not just “cite” it and copying the one paragraph summaries of it from other authors.
No, M_F, you can’t distinguish between people knowing something and not necessarily accepting it. Another pathetic failure.
No LK, I know the difference between knowing something and accepting that something. I never presumed or implied or claimed otherwise.
Dispersed knowledge is not something any credible economist can reject. It is absurd to claim that mainstream economists know about dispersed knowledge, but for some reason deny it exists. It would be tantamount to claiming that mainstream economists believe that the sum of all knowledge is known by each and every individual.
You’re going about this the wrong way.
What mainstream economists by and large do not understand is how dispersed knowledge relates to economic coordination in a division of labor.
It is why they treat “asymmetric information” as a flaw in what would otherwise be an efficient market. In other words, they perceive dispersed knowledge as a flaw or fetter because they don’t understand it. They don’t know how to explain efficient market prices in a context of dispersed knowledge.
The doctrine of “pure and perfect competition” is a bastard stepchild of the confusion over it.
It is because they neglect fundamental uncertainty and use simplistic GE models. Again, you are contemptibly ignorant even of neoclassical economics.
As noted above, the whole disciple of “information economics” – by people like Joseph Stiglitz, George Akerlof, and Michael Spence – takes Hayek’s articles on information as one of its foundations. They discuss Hayek’s idea THOROUGHLY.
You need only read Joseph Stiglitz’s paper “The Contributions of the Economics of Information to Twentieth Century Economics,” Quarterly Journal of Economics 115.4 (2000): 1441–1478, to see this.
LK,
Your conception of the phrase “thoroughly” is very shallow.
The paper by Stiglitz does not “thoroughly” discuss dispersed information. As far as I can tell, Stiglitz mentions Hayek only twice, both in passing. On page 1448 he states that Hayek presumed dispersed knowledge was efficient, and in some ways socially desirable, but did not present a “formal” argument. Then on page 1469 he mentions that Hayek focused too narrowly on information about scarcity.
That is all I can find (pdf copy I have is not searchable).
That is a very poor example of evidence for “the mainstream understands dispersed knowledge.”
The paper by Stiglitz actually represents a good example of how not understanding dispersed knowledge can lead an economist to regard it as a fetter or “imperfection” of markets.
Dispersed information, for those of us who do understand it, is not an imperfection at all. It is a vital component to a division of labor economy that allows for greater productivity and gsins through trade.
Stiglitz, Akerlov, and others have been, wittingly or unwittingly, hoodwinked by Hegalian/Marxist philosophy that regards movements away from cosmic collectivism and away from chiliastic reabsorption as a degradation in human life. They view the ideal, the perfect, as singularity, a union of mankind as one.
This tradition holds dispersed labor (as per Marx) and dispersed knowledge (as per Hegel), as a dehumanizing, corrupting, or at the very least “inefficient”, phenomena that only strong collectivist union can repair.
They don’t understand dispersed knowledge. They know of it, they can recite the summary, but they don’t “get” it.
As if Stiglitz has to mention Hayek’s name on every page to understand and analyse his views on prices and information.
Notice how you keep shifting the goalposts, in a desperate and laughable attempt to win an argument you lost long ago. Next you’ll demand that he must have learned it personally form Hayek to understand “dispersed information”, or some other utter nonsense.
And if you really read the paper you would have noticed:
“Hayek was correct in arguing that the central problem of economics was a problem of knowledge or information: ‘the utilization of knowledge not given to anyone in its totality’ [1945, p. 520].” (Stiglitz 2000: 1468–1469).
According to your harebrained ramblings, NO!! Stilglitz doesn’t understand prices as knowledge.
You can also read Stiglitz’s Whither Socialism?? , in particular pp. 24-26, and passim.
LK:
No, not “as if Stiglitz has to mention Hayek on every page.”
I’m saying what Stiglitz has mentioned in the paper you cited, is not sufficient evidence that he understands dispersed knowledge.
I am not shifting any goalposts. I stand by what I said. The paper you cited does not challenge it.
“And if you really read the paper you would have noticed:”
“Hayek was correct in arguing that the central problem of economics was a problem of knowledge or information: ‘the utilization of knowledge not given to anyone in its totality’ [1945, p. 520].”
I know, I was the one who pointed out that passage to you in my previous post.
“According to your harebrained ramblings, NO!! Stilglitz doesn’t understand prices as knowledge.”
I never claimed or implied that “Stiglitz doesn’t understand prices as knowledge.”
Straw man.
“You can also read Stiglitz’s Whither Socialism?? , in particular pp. 24-26, and passim.”
I remember years ago laughing at a claim he made in the paper you cited previously. Still funny. Stiglitz actually believes: In an insurance market with moral hazard, if individuals take risky actions that cannot be monitored, premiums will increase; it is in nobody’s interest to expend the effort to exert greater care. Apparently, it follows that governments pointing guns at people and stealing their money, or what Stiglitz calls “taxation”, might lead to greater care, and would in general lead to Pareto improvements. LOL!
John,
All it takes is to read what Krugman writes. Here and here are analyses of Krugman’s take on Austrian Business Cycle Theory that explain his lack of understanding. Notice that he uses the term “hangover theory”, which is kind of funny, since it really is a completely different, made-up strawman theory, not the ABCT at all.
“Krugman doesn’t know the first thing about Austrian concepts or analysis”
That makes two of you. lol
LK, you don’t understand Auatrian economics, so your presumed claim to be able to assess whether Roddis understands it, is hilarious.
You’re not convincing anyone…
No, M_F, YOU don’t understand Austrian economics. Most of the economic theory you spout is your own invention, and has little to do with actual published Austrian theory. Witness your absurd statements about how it allegedly doesn’t matter how long markets take to clear. That is not an Austrian view.
E.g.,
“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.
——
According to you, “quickly” can mean any time at all. lol.
LK, you don’t understand Austrian economics. Virtually every citation you make lacks discussion that shows you understood what was written.
Telling me that the arguments I make are not orthodox Austrian, and thus serves as evidence I don’t understand it, is an argument that relies on the absurd assumption, which I have repeatedly corrected, that when I argue a point, I am not necessarily doing so by “representing” or “referencing” a specific Austrian argument.
Yes, much of what I think IS my own. I am not ashamed of that, and that alone certainly is not sufficient grounds for you to say I don’t understand a particular theory. Do you honestly think I don’t understand that by “quickly” Murphy had a max timeline in mind? What does that have to do with my understanding or lack of understanding Austrian theory?
You believe in the crazy notion that the only way one can understand a theory, is to personally agree with it and utilize it in one’s arguments as premises that are presumed true.
Again, you’re not convincing anyone.
“Yes, much of what I think IS my own.”
Right. And often badly distorting or misunderstanding actual Austrian theory
LK,
You’re still grasping at straws.
If I have my own theory, then of course it will not be identical to what anyone else wrote, let alone Austrians.
But you don’t understand Austrian theory enough to even recognize the difference, which is why you can only argue semantics of what “quickly” means and what “immediately” means.
I read the exchange on LK’s blog and, as a lay person, two things hit me: (1) name calling is very unattractive, and (2) it really reads like LK understands economic calculation perfectly well, he just doesn’t agree with some aspects of its use in Austrian theory. And Bob Roddis doesn’t agree right back at him. I’m really not sure the problem is failure to understand; the two economic schools are just different and their adherents don’t agree with each other. This is not very unusual between differing schools. I just wish I could tell if either is right.
Bob Roddis hasn’t the foggiest idea about basic Austrian theories, like Austrian price theory. Witness his utterly bizarre and absurd idea that booms have market clearing prices:
“A 20 year unsustainable Keynesian boom would have had ‘market clearing prices’ for 20 years right up until the bottom drops out.”
http://mikenormaneconomics.blogspot.com/2013/01/lord-keynes-debunking-austrian.html?showComment=1359199941427#c5328116548878528365
——-
Any person who actually know economics can see that this is the statement of an ignoramus.
And notice how no Austrians on this blog even bother to correct him when he makes such a cringe-worthy statement.
So when the market clears in a line production for years during a boom, it really didn’t clear, right?
How does one even know for sure that the line of production one is in is actually unsustainable until after the bottom drops out?
A market clearing price is one where quantity demanded equals quantity supplied, and the market is in equilibrium, with no excess demand or supply, no shortages or surpluses.
During a “boom” there will be excess demand in some markets (e.g., as there was in the 2000s in the asset bubble in housing) and in others (where inventories play a big role) rising demand but still excess supply in inventories, which entails that most prices cannot be market clearing prices.
You are utterly laughable. You have no understanding even of basic Austrian price theory.
Thank you for the definitive reason why the term “market clearing prices” is worthless.
Now go away.
“Thank you for the definitive reason why the term “market clearing prices” is worthless.”
Well, if so, it follows that Austrian price theory is worthless — and the Austrian theory of economic coordination is worthless.
You had better break the sad news to Robert Murphy:
“An equilibrium price is one in which quantity supplied equals quantity demanded. Graphically, it occurs at the intersection of the supply and demand curves. The market tends toward equilibrium: If the current price is above the equilibrium price, there is an excess supply (‘surplus’) and sellers reduce their asking price. If the current price is below the equilibrium price, there is an excess demand (‘shortage’) and buyers increase their offer price.” (Murphy, Robert P. 2006. Study Guide to Man, Economy, and State: A Treatise on Economic Principles with Power and Market: Government and the Economy. Scholar’s Edition (2nd edn.). pp. 19–20).
————-
Evidently poor old Bob Murphy has been wasting his time with Austrian
economics all these years!!
lol.
Poor old Bob Murphy continues to use a “worthless” concept — if only he’d listened to greatest Austrian economist on the planet and in human history, Bob Roddis!:
“A surplus (or a ‘glut’) occurs when producers are trying to sell more units of a good or service than consumers want to purchase (at a particular price). A shortage occurs when consumers want to buy more units than producers want to sell (at a particular price). In this context, the equilibrium price (or the market-clearing price) is the one at which the amount supplied exactly equals the amount demanded. If the market is in equilibrium, there is no surplus and no shortage.”
(Murphy, Robert P. 2010. Lessons for the Young Economist. pp. 156–157).
Roddis meant that “MARKET clearing prices” are worthless as a means to explaining prices IN A HAMPERED MARKET.
Your whole tangent is based off that misunderstanding.
Stop inventing positions and ascribing them to roddis: he can speak for himself.
His statements in the past show that what you say is NOT what he means. If he thinks market clearing is a fundamental and coherent concept for his ideal “free market” system, let him say so.
Or is it that you think you can interpret any statement by anyone in whatever way you like now? — matching your absurd idea that “immediately” can mean can time at all?
I am not inventing anything of Roddis wrote.
He HAS said so umpteen times LK.
No, he doesn’t:
“I do not like the term “market clearing prices”. I don’t use it and I do not think it is particularly helpful in understanding reality. When I see the term used, my reaction is always “WTF are you actually trying to say”?”
http://mikenormaneconomics.blogspot.com/2013/05/daniel-little-what-about-marx.html?showComment=1369144674917#c9135395
He doesn’t like the TERM market clearing prices.
He is more concerned about what about reality you’re talking about.
This is not him saying the theory is worthless. He is saying the phrase is worthless.
Let him speak for himself.
He cannot, of course. because he is clueless — like you.
Roddis has spoken for himself on this, but you keep arguing as if he hasn’t.
I remember it. You don’t.
Bob Murphy:
Heh this is actually funny. I had always assumed Roddis was being unfair when accusing LK–who has read a ton of Hayek–of not knowing the Austrian concept of economic calculation. But, based on LK’s angry retort, turns out Roddis was right.
http://consultingbyrpm.com/blog/2012/09/tom-woods-keeps-krugmans-feet-to-the-fire.html#comment-45198
Also, LK INSISTS that Austrian theory (which holds that people broadly seek to satisfy their “psychic profit” via Human Action as opposed to narrow monetary profit) MANDATES that when a firm has overproduced a line of goods, IT MUST ALWAYS SLASH PRICES to resolve the problem and that actual evidence of firms maintaining prices but cutting production refutes Austrian analysis. If someone is going to buy into that sort of nonsense, there is not much anyone can do about it.
(1) Murphy is wrong.
(2) Austrian theory says that market economies achieve economic coordination to a great extent by price and wage flexibility so that there is a tendency towards market clearing.
You are utterly incapable of understanding that, and this is why you are ignorant of Austrian theory, and ignorant of your Hayek quote.
And also why you make ridiculous statements like the one above.
E.g., if Austrian theory says that businesses can all or mainly pursue psychic profit at the expense of monetary profit, then the whole theories of economic calculation and economic coordination are bankrupt.
Lol, “to a great extent.”
You lose.
Murphy was right.
“Austrian theory says that market economies achieve economic coordination to a great extent by price and wage flexibility”
How else are they supposed to achieve ‘economic coordination’ in the Austrian framework?
Philippe: by magic perhaps?
If roddis wants to argue that a flexible price and wage system, which has a **tendency towards** clearing product markets and the labour markets (though never reaching Mises’ final state of rest), is not a crucial part of Austrian theory, then it follows many Austrian theories have been utterly undermined and left without foundation.
Why oppose a minimum wage on economic grounds if a flexible wage system which tends to clear the labour market ISN’T a part of Austrian theory?
Price and wage flexibility is just what we refer to people setting prices and wage rates that they believe benefit them the most at the margin, where what benefits them the most at the margin itself changes ovet time as new knowledge, technology, and saving/consumption tendencies emerge.
What LK is thinking of when he sits back and asks OK Auatrians, let us see this price and wage flexibility, he is thinking of the fallout of a hampered market, a post inflationary boom, coupled with labor market regulations, and the perpetuation of central banks that promise perpetual pricrpe inflation.
In this environment, he expects that Austrian theory correctly applied would necessitate full, or almost full, recoordination to take place on the side of prices and wage rates “quickly”.
In other words, LK is asserting that Austrian theory predicts that given the conditions above, Austrian theory predicts that prices and wages will quickly come down and prevent increases in unemployment.
That is not Austrian theory of coordination. Roddis is right, LK is clueless.
LK’s latest comment about minimum wage is definitive proof he doesn’t understand Austrian theory.
His prattling reminds me that Feser article, in how a theory of a school of thought is twisted and distorted and remain attributed to that school of thought.
“In other words, LK is asserting that Austrian theory predicts that given the conditions above, Austrian theory predicts that prices and wages will quickly come down and prevent increases in unemployment.”
No, I am not. More pathological lying, since you have read my comments on this many times, but continue to invent lies.
I said that a flexible price and wage system, which has a **tendency towards** clearing product markets and the labour markets (though never reaching Mises’ final state of rest) is
(1) a fundamental theory of how an **ideal free market** should function in Austrian theory, and
(3) the Austrian policy prescription for what they call the “hampered” market”, whose price and wage rigidity they blame mainly on government interventions and pro-union policies, central banks and so on.
—————
On (2) they wrong: it is mostly the private sector itself — though its very extensive use of mark-up pricing and many people’s opposition to nominal wage cuts — that cause the high degree of relative downward price and wage rigidity we see today.
“Price and wage flexibility is just what we refer to people setting prices and wage rates that they believe benefit them the most at the margin”
That’s nonsense. You’re trying to say that inflexible prices and wages are actually the same thing as ‘flexible prices and wages’.
Lord Keynes, you’re completely wrong here. Quantity supplied equaled quantity demanded in the stock market at every point during the 2000s stock bubble (i.e., every market participant could buy and sell stocks without fear of inability to purchase or sell). In the Soviet Union, much of the population lived with their parents as there was no way for them to buy housing, no matter how many rubles they had. This is a situation in which quantity demanded is greater than quantity supplied.
Another commentator on this blog who fails to understand basic Austrian concepts.
No, in a bubble, where the price is being constantly driven higher, that means EXCESS DEMAND, not market clearing.
Thanks for showing us your ignorance.
LK,
Lol, a “fundamental component”.
You lose again.
Austrian theory may put heavy emphasis on prices adjusting as a means to coordination, but nowhere is there anything of what you are suggesting, which is that prices must adjust in such away that unemployment never arises.
What you price “rigidity” is nothing more or less than some unstated, politically motivated standard for how quickly prices must adjust so as to say the real world does not adjust that quickly,and therefore violent state intervention is justified.
Austrian theory makes no predictions for how quickly prices must adjust when there is a change in demand. It does say that prices tend to adjust towards those prices that would equalize supply and demand.
Mark up prices are not immune from adjustment when there is a change in demand. Mark up prices can and do adjust by way of cost prices adjusting. You can see what the history of cost price adjustments looked like by such charts as the PPI, but bear in mind that these are hampered prices, not free market prices. Free market cost price adjustments may very well appear as even more volatile.
Austrian theory does not claim that business owners never adjust production levels, or labor hours, in response to, or in anticipation of, demand changes.
Austrian theory does not predict zero unemployment with every change in demand.
LK,
You don’t seem capable of grasping what Enopoletus Harding and Roddis are arguing when they say markets are clearing during booms.
You wrote:
“No, in a bubble, where the price is being constantly driven higher, that means EXCESS DEMAND, not market clearing.”
That IS what they say “market clearing” can mean!
Rising prices does not necessarily mean excess demand. Market clearing prices does not mean only stable prices, or falling prices. Market clearing prices includes ALL historical price trends.
An excess demand means, according to what Harding is saying, a SHORTAGE.
LK you are so utterly confused.
“Market clearing prices includes ALL historical price trends.”
lol.. so now the expression “market clearing prices” can just be re-defined at will to mean all prices in human history!
Thanks for admitting you have no substantive arguments.
Major.Freedom, what about scalpers? Concerts routinely sell out with people still wanting tickets. Tickets are resold at a higher price. Do you maintain the box office price is a market clearing price? It looks like LK’s excess demand. People go away grumbling.
Impatient,
He’s trying re-define “market clearing prices” as a term totally tautological and empty of empirical content.
Basically:
prices = market clearing prices, by definition.
——–
A piece of empty sophistry.
That is the point of my hypothetical. A MCP is not just a price at which everything sells, which is the box office price in my example.
LK:
“lol.. so now the expression “market clearing prices” can just be re-defined at will to mean all prices in human history!”
You have a pretty bad habit of treating corrections to your long held fallacies as examples of the correcter “suddenly” or “now all of a sudden” changing.
What I said has ALWAYS been the case, you have just deluded yourself into believing the myth that mark up pricing somehow serves as a refutation or barrier or fetter to Austrian price theory. You just lapped that up from your lords and masters without even bothering to closely scrutinize it.
——————-
Impatient:
“Major.Freedom, what about scalpers? Concerts routinely sell out with people still wanting tickets. Tickets are resold at a higher price. Do you maintain the box office price is a market clearing price? It looks like LK’s excess demand. People go away grumbling.”
I do not deny that excess demand can exist. I just deny that is a concept derived from observing temporally rising prices.
In the case of scalpers, their job is to get the highest price they can get. They will tend to set a price that reduces quantity demanded down to quantity supplied. Of course there might be occasions when the scalpers set too low a price such that people who are able AND WILLING to pay those prices, can’t buy any tickets because they sell out.
People turning away grumbling…is it because they don’t want to pay the high prices, or is it because they would have paid the high price but missed their chance? If the latter persists, wouldn’t the scalpers start raising their prices so as to make sure they aren’t selling tickets at prices that could otherwise be higher without reducing quantity demanded BELOW quantity supplied?
Also, ignore LK’s attempts of trying to summarize what I think. It is almost always straw men.
“Also, LK INSISTS that Austrian theory … MANDATES that when a firm has overproduced a line of goods, IT MUST ALWAYS SLASH PRICES “
In point of fact, this IS exactly what Rothbard says should happen in an ideal free market:
“There is no reason why prices cannot fall low enough, in a free market, to clear the market and sell all the goods available. If businessmen choose to keep prices up, they are simply speculating on an imminent rise in market prices; they are, in short, voluntarily investing in inventory. If they wish to sell their “surplus” stock, they need only cut their prices low enough to sell all of their product. But won’t they then suffer losses? Of course, but now the discussion has shifted to a different plane. “
Murray Newton Rothbard, America’s Great Depression (5th edn, 2008), pp. 56-57.
—————————-
Your problem is: you don’t read your own Austrian authors. You are clueless.
Where is Rothbard saying in that quote what “should” happen?
All he is saying here is that if businessmen choose not to lower their prices (as freedom to make these kinds of choices is presumably the businessman’s prerogative), then he essentially is investing in inventory, hoping to sell at a later date. Rothbard is not saying the businessman should do anything, he is just laying out the consequence of the choices businessmen can make. Rothbard doesn’t even make a value judgement on the choice, because that’s all it is, a choice by the businessman, who is the owner of the product.
Am I misreading this? Where exactly is he saying what “should” happen?
Yes, I phrased my first point badly.
What I should have said is:
“In point of fact, Rothbard IS saying that to achieve economic coordination — a tendency to supply and demand equilibrium in product markets — firms need to adjust prices to clear the market.”
That is correct.
And in fact, Rothbard also misunderstands how most businesses use inventory too. They are not speculating on price rises (since most prices are mark-up prices, not flexprices), but holding stock as a buffer to deal with demand changes.
LK,
Rothbard also never argued that demand changes must always and only be responded to, or anticipated with, selling price changes.
Mark up prices are flex prices, because those prices can and do change when cost prices change, and cost prices can and do change with changes in demand.
All prices are flex prices,if by flex we mean they are subject to changes by economic actors.
I rarely if ever see the price of ANYTHING remain fixed. Off the top of my head, there is the hotdog and soda from Costco, which has been $1.50 for over 10 yearsat least.
Even the prices of the most cost based good there are, like cars and processed foods, those prices are changing.
“but holding stock as a buffer to deal with demand changes”
While that is perhaps A reason to hold stock, it’s not the only one. Unreliable suppliers may be another one to build a buffer. And yes, holding on to inventory in the hope to sell them at a later date for a price currently not attainable is also a reason.
In fact, there are many reasons for a firm to hold stock.
There are also firms who cannot hold stock (Airlines and strawberry farmers come to mind). This is why on a flight from NY to SF you never find two people who paid the exact same amount for their ticket.
And yes, prices are generally “mark up” (How else can you make a profit?) . However, the margin is whatever the market will bear and my competitive position, it is not a fixed markup. Depending on the number of competitors and knowledge asymmetry, it can give businessmen considerable flexibility in pricing. And yes, sometimes businessmen have to sell stuff at a loss. That’s the fun of being a businessman, trying to estimate your market. If you’re right, all is cool (Costco), but if you’re wrong you lose money (Sears).
Rothbard and von Mises explained these things pretty clearly, it’s certainly not rocket science.
Bob Roddis,
I’ve never seen you give a meaningful, coherent, or substantive explanation of the supposed ‘Austrian concepts and analysis’ you claim other people don’t understand.
All I’ve seen you do is repeat the same vague and meaningless assertions over and over again, such as “violent funny money dilution distorts economic calculation”.
Perhaps you could attempt to explain precisely what you think you mean by such statements.
You would not remember or understand if he did (he has numerous times).
Roddis can’t even give such a definition. He is too ignorant . Full stop.
He has answered it already, and you don’t understand Austrian theory, full stop.
Yes, he has — by saying: I AM CLUELESS:
http://consultingbyrpm.com/blog/2014/09/potpourri-231.html#comment-960311
Major, it seems clear that LK and Philippe consider you and Roddis as their intellectual superior. So they consider arguing with you guys as aiming high to better themselves. So take it easy on them its not like they are geniuses who come here to argue with their inferiors because of low self esteem or some psychological trauma suffered in their youth at the hands of an abusive mother.
“(he has numerous times).”
Perhaps you could link to a comment in which he has attempted to give a meaningful, coherent and substantive explanation of the supposed ‘Austrian concepts and analysis’.
Well, Phil, there is this priceless gem:
“I do not like the term “market clearing prices”. I don’t use it and I do not think it is particularly helpful in understanding reality. When I see the term used, my reaction is always “WTF are you actually trying to say”?”
http://mikenormaneconomics.blogspot.com/2013/05/daniel-little-what-about-marx.html?showComment=1369144674917#c9135395
————–
Obviously roddis doesn’t understand the concept of “market clearing prices” — not even in an ideal free market economy, despite M_F’s disastrous attempts to speak for roddis above.
Roddis does understand what equilibrium means. He just rejects it as relating to nothing in the real world.
He thinks of supply and demand disruptions not as deviations away from market clearing prices, but from those prices that would prevail in a free market which he regards as the highest quality of information, that is not itself perfect, nor in equilibrium. He has stated many times that he thinks of price distortions not as distortions from YOUR conception of market clearing prices, but from free market haggling and messy prices, so to speak.
To reject “market clearing prices” as incapable of explaining real world prices in a free market or in a hampered market, is not to display “misunderstanding” of it. He taught you this.
He just rejects it as relating to nothing in the real world.
No, M_F, we are talking about a **tendency** to market clearing prices, not general equilibrium, nor the idea that Mises’ final state of rest will actually come about.
More lying by you.
“To reject “market clearing prices” as incapable of explaining real world prices in a free market or in a hampered market, is not to display “misunderstanding” of it. “
Again, more lying: we are talking about a **tendency** to market clearing prices and wages as part of the Misesian theory of economic coordination.
Try to answer without inventing straw man arguments.
“He thinks of supply and demand disruptions not as deviations away from market clearing prices, but from those prices that would prevail in a free market which he regards as the highest quality of information”
What we have here in the case of MF and Roddis is two people who are incapable of making an economic argument. Instead they dress up their circular political arguments in economicky-sounding language.
LK,
Adding the word “tendency” doesn’t affect a single thing I said.
Roddis rejects the term market clearing prices, and he rejects the term a tendency towards market clearing prices.
Surely you can understand that if someone rejects an term referring to empirical conditons, then they would reject a “tendency” to what that term is referring to.
MF: LK linked to my comment on his blog that has links to two interesting papers
http://consultingbyrpm.com/blog/2014/09/potpourri-231.html#comment-956679
“Knut Wicksell and Ludwig von Mises On Money, Interest And Price Dynamics” by Agnès Festré and
“The Economic Calculation Debate: Lessons for Austrians” by Israel M. Kirzner
Wicksell surely did not see interest in the same way as Mises, which is just another price determined by purely subjective values. Wicksell’s “static equilibrium” is surely not the same as Mises’ “dynamic equilibrium”. References to Wicksell to explain Austrian analysis is pointless.
Kirzner points out that the significance of “economic calculation” and the explanations of “economic calculation” have been refined over time. It became clearer over time that Austrian analysis is quite distinct from other schools and from the types of analysis with which it had been (and continues to be) lumped.
LK’s primary tactic is to take various statements by Austrians out of context and insist that his version be carried to an absurd extreme. This is because he does not understand the dynamic PROCESS of voluntary exchange vs violent intervention, prices (and all terms of trade) as the objective manifestation of subjective values and that human action extends beyond homo economicus,
Further, like all Keynesians, he cannot even see the central Austrian argument that Keynesian policy and artificial credit expansion distort the pricing process.
On a depressing note, I notice that the final “debate” on the “entrepreneurs must slash prices not cut production” nonsense was already 18 months ago.
“References to Wicksell to explain Austrian analysis is pointless.”
So Wicksellian loanable funds theory and Wicksell’s natural rate of interest aren’t taken over by early Mises and Hayek in their Austrian trade cycle theory?
We need only consult an ACTUAL work on Austrian economics to see your nonsense:
“ABCT …. demonstrates the connection between this structure of capital and monetary policy by way of Wicksell’s natural rate of interest theory and Mises’s integration of money into general economic theory” (Batemarco, R. J. 1998. “Austrian Business Cycle Theory,” in P. J. Boettke (ed.), The Elgar Companion to Austrian Economics, Elgar, Cheltenham, UK. 216–336, at p. 216)
——————–
Every comment you make just shows how utterly ignorant you are, roddis.
The only concept necessary in this regard to explain Austrian analysis is the concept of undistorted prices and undistorted interest rates. The concept of a “natural rate” or “natural rates” of interest are confusing and promote petty arguments about the alleged deep philosophy meaning of those terms. Whether or not Mises “adopted” Wicksell’s concept initially becomes irrelevant when the concept as applied by Austrians becomes so completely distinct. The concept of distorted and undistorted interest rates does not DEPEND upon whatever it was that Wicksell was selling 100 years ago.
GET THIS STRAIGHT LK: I know the history of these terms. I don’t think they are helpful in explaining Austrian theory, concepts and analysis (which is not particularly complicated) to lay people . There is no need for Austrian analysis to be in competition with Keynesianism in the department of unintelligible jargon.
Please explain clearly what you mean by ‘undistorted prices’.
Please explain clearly what you mean by ‘undistorted interest rates’.
Please be precise.
If you think no concept of a Wicksellian “natural rate” is at all needed in the classic ABCT, you are clueless and embarrassing, roddis,
You CANNOT even define “undistorted prices and undistorted interest rates”, economically speaking, in Austrian theory without reference to Wicksellian loanable funds and the concept of a tendency to supply and demand equilibrium via flexible prices or interest rates.
“GET THIS STRAIGHT LK: I know the history of these terms.”
No, you don’t; You DON”T even understand the concept of market clearing prices:
“I do not like the term “market clearing prices”. I don’t use it and I do not think it is particularly helpful in understanding reality. When I see the term used, my reaction is always “WTF are you actually trying to say”?”
http://mikenormaneconomics.blogspot.com/2013/05/daniel-little-what-about-marx.html?showComment=1369144674917#c9135395
LK,
A single “Wicksellian” natural interest rate is NOT necessary in ABCT. That is just how it was originally explicated.
Undistorted prices are prices manifesting from individual property rights, that is, individuals actually able to determine prices without being coerced, directly through regulatiom or indirectly through socialist money.
“A single “Wicksellian” natural interest rate is NOT necessary in ABCT.
ALL versions of the ABCT use a single “Wicksellian” natural interest rate or its functional equivalent, such as Mises’ originary interest rate on capital goods.
We already had this debate and you lost, by admitting this:
“Yes, there is a rather large burden on Austrians to publish a more modern exposition of ABCT that takes into account the assumption of multiple natural interest rates.
As it stands, it is incomplete in its details”
http://socialdemocracy21stcentury.blogspot.com/2011/09/abct-without-unique-natural-rate-of.html?showComment=1316780322443#c4592654599806622369
Look, LK: We have a standoff here. You go to the public with your “ABCT DEPENDS upon a SINGLE Wicksellian Natural Rate of Interest” and I’ll stick with my “LK and Keynesians have no understanding whatsoever of the concept of economic calculation”.
No, it is YOU who can’t fathom the concept of economic calculation.
Misesian economic calculation means:
(1) an economy has money prices for capital goods/input goods and output goods/consumer goods or more capital goods, and
(2) businesses calculate profits and losses with money prices and the economy must have a relatively stable purchasing power for money.
——————
Mises says explicitly: “For the sake of economic calculation ALL that is needed is to avoid great and abrupt fluctuations in the supply of money.”
Mainstream neoclassical economists understand this. Keynes understood it.
Heterodox economists understand this. E.g., G. Ingham, 2011. Capitalism. Polity, Cambridge, p. 45:
“Although capitalist activity was based on calculation, which was made possible by money’s role as a stable standard of value, uncertainty was an eradicable feature of human existence. Given certain facts, the probability of risk could be calculated; but Keynes distinguished this from uncertainty – that is, situations and circumstances in which we do not know and have no means of knowing how events will unfold. This becomes increasingly the case the further into the future we try to predict and project our endeavours. In the face of such uncertainty, holding money offered psychological security, but the withdrawal of purchasing power diminished production and consumption.”
“Undistorted prices are prices manifesting from individual property rights, that is, individuals actually able to determine prices without being coerced, directly through regulatiom or indirectly through socialist money”
That is a political “libertarian” or “anarcho-capitalist” statement, not an economic argument.
You two constantly confuse economics with your political ideology. You don’t even know the difference.
LK,
By you saying I “admitted” that orthodox ABCT should be updated to include multiple natural interest rates, you are in fact admitting that a single natural interest rate is necessary in ABCT.
What that means is wgatI have repeatedly stated before: that ABCT can easily incorporate multiple rates simply by us adding an “s” to wherever “natural interest rate” and “originary interest rate” is written. The core of ABCT is not contradicted by doing this. At best all it would “accomplish”, if such a term is to be appropriate, is to satisfy the vanity of those who falsely believe they have seriously challenged ABCT.
With respect to economic calculation, you are not displaying any understanding of it by quoting a passage from Mises regarding the necessary conditions for efficient calculation to take place.
Your (1) is only one component for calculation to take place. And you have not the foggiest clue how state intervention SHORT of communism adversely affects calculation in this respect.
You falsely believe that Austrian theory regarding economic calculation is only a critique of communist systems. You falsely believe that Austrian theory would treat a hampered capital market as pure and perfect calculation taking place, on the absurd and vague basis that all that is necessary is for capital to be “predominantly” privately owned. This contradicts what Austrian theory defines as private ownership. No, it is not anarcho-capitalism necessarily, but rather it takes into account not only nominal ownership on paper, but also control. As Mises explained, capital that is privately owned, but state controlled, as in Nazi Germany, is not sufficient to claim that this is a capitalist economy with unhampered calculation.
Austrian theory addresses more than just communist societies. It can explain why there are recessions in an economy with “predominantly private ownership of the means of production” by explaining the consequences of state intervention that reduces the effectiveness of private ownership regulating the allocation of capital and labor.
Mises wrote:
“What economic calculation requires [p. 224] is a monetary system whose functioning is not sabotaged by government interference. 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.”
What you are dishonestly doing is making it seem like Mises argued that by “stable money” Mises left open the possibility that this can be achieved by governments as, to quote you, “mainstream economists and as Keynes understood it.”
By stable money Mises did not mean it as Keynes and mainstream economists understood it, and in fact he explicitly rejected their notion of it. Mises referred to gold as doing a decent job of providing a necessary condition for a money to serve as a means of calculation, and criticized fiat money.
You are not explaining what economic calculation means nor what it entails nor whether it is hampered or not hampered by quoting Mises out of context and not only that, but quoting only what Mises regarded as a necessary condition for it, which of course is not economic calculation itself.
(1) ” you are in fact admitting that a single natural interest rate is necessary in ABCT. “
Glad you admit it!
(2) on economic calculation, Mises is wrong about governments. Full stop.
The issue here is whether non-Austrians understand the theory, not about whether they agree with Mises on ever point in his ideological extremism.
LK,
(1) I made a typo. I forgot the word “not” as in “not necessary”. If you claim that I admit that orthodox ABCT needs to be “updated” with multiple rates, then that implies the core of ABCT remains unchallenged. If multiple interest rates were more significsnt than they are, then ABCT would not even be capable of being updated. It would be refuted. Since you continually favorably refer to Murphy’s work on this, it means you agree with me on this.
(2) With respect to Mises’ work on economic calculation, you have not shown he is wrong about governments, full stop, triple stamped it, no quincies.
LK,
You are an ideological extremist, by the way. You are absolutely extreme about territorial monopolies of protection, and “aggregate demand managers”.
Total extremist there. Zero compromise with anarchists. Not even a local try out basis. You want statism EVERYWHERE, forced on billions of people, the overwhelming majority of whom you have never met and have little to no clue what they want for themselves.
“he does not understand the dynamic PROCESS of voluntary exchange vs violent intervention”
This is a political “libertarian” statement, not an economic argument.
Please explain clearly what you mean by ‘the dynamic process of voluntary exchange vs violent intervention’ and how this relates to the economic theory under discussion.
“prices (and all terms of trade) as the objective manifestation of subjective values and that human action extends beyond homo economicus”
Please explain clearly what you mean by all this and how it relates to the discussion. Please be precise.
“he cannot even see the central Austrian argument that Keynesian policy and artificial credit expansion distort the pricing process.”
Please explain clearly what you mean by ‘distort the pricing process’. Please explain clearly what you mean by ‘artificial credit expansion’. Please explain clearly how Keynesian policy ‘distorts the pricing process. Please be precise.
So far you have not made any substantive arguments. You have simply repeated your usual unexplained assertions. So far you have not demonstrated any understanding of the issues.
Philippe, he has written on all this stuff a million times already. You should go back and search the previous posts instead of putting the onus on Roddis to continually repeat himself as if you are entitled to it.
“he has written on all this stuff a million times already”
All he has done is repeat the same unexplained assertions and slogans over and over again. He has never demonstrated any actual understanding of any of the issues.
Sure he has, you just choose not to read them.
Yes, M _F, you mean stuff like this:
“For the record, I don’t care whatsoever about “market clearing prices”.”
http://consultingbyrpm.com/blog/2014/07/krugmans-kontortions-on-france.html#comment-731147
“I do not like the term “market clearing prices”. I don’t use it and I do not think it is particularly helpful in understanding reality. When I see the term used, my reaction is always “WTF are you actually trying to say”?”
http://mikenormaneconomics.blogspot.com/2013/05/daniel-little-what-about-marx.html?showComment=1369144674917#c9135395
Economics as the study of ACTION includes voluntary actions and coercive/violent actions.
Economists can address the effects and the phenomena of violent intervention as opposed to cooperation, without making any normative statements.
you’re just using political rhetoric instead of making actual economic arguments.
Political action is action, Philippe. It is subject to economic analysis.
Merely telling me that I am “just using political rhetoric instead of making actual economic arguments” is is just a hand waving exercise that is devoid of substance or critical thinking.
“Political action is action, Philippe. It is subject to economic analysis”
you’re not engaging in economic analysis, you’re just rolling out your usual idiot rhetoric of “violence!”
Philippe:
You’re not engaging in any economic analysis. You’re just repeatedly spewing “you’re not engaging in economic analysis, you’re just rolling out your usual idiot rhetoric of “violence!”” rhetoric.
This Keynesian incomprehension is really beyond comprehension. THE KEYNESIAN PROGRAM ITSELF OPENLY CONSISTS OF ARTIFICIALLY INDUCING AND FACILITATING PURCHASES OF FINISH PRODUCTS THAT WOULD NOT OTHERWISE OCCUR WITHOUT THEIR MAGIC “STIMULUS”. Those sales prices are distorted and unsustainable. In any event, they are sure different than what would have been the case without the “stimulus”.
THE KEYNESIAN PROGRAM ITSELF OPENLY CONSISTS OF ARTIFICIALLY INDUCING AND FACILITATING THE BORROWING OF FUNNY MONEY THAT WOULD NOT OTHERWISE OCCUR WITHOUT THEIR MAGIC “STIMULUS”. Those loans are made at distorted interest rates and the new money artificially bids up the prices of goods and services in a distorted and unsustainable manner that would not exist but for the “stimulus”.
Maybe I should repeat it 75 times. zzzzzzz
The notion of “artificial” demand is without credible economic foundation.
Even in a gold standard, any negotiable credit instrument can allow demand for goods beyond the value of commodity money.
Essentially your system boils down to a pathological hared of capitalism and free exchange which, in any sophisticated enough economy, has ALWAYS proceeded via the use of endogenous money that private economic agents create.
In essence, your system would require a coercive and violent attack on private enterprise, private exchange and contracts, forcing people not to use credit money.
No LK. You are completely wrong.
Would it be wrong to say that in the last 75 years both Keynesians and Austrians have made very significant contributions to the science of economics? Keynes began to diminish some in stature in the late 70s and 80s and is now experiencing something of a renaissance because Keynesian economic theory seems to have explained economic conditions during and after the 2008 Recession better than expected by some. (I know this isn’t the view here; I’m just talking about generally).
Austrian economics as practiced today has fallen out of favor generally and is taught at only a few schools and is generally considered heterodox by most professional economists, in part because it eschews empirical evidence and denies any predictive power.
Again, I’m not sure the issue is either that LK or Bob Roddis don’t understand the theories they’re talking about. I also note that phrasing it in those terms is incredibly insulting to both parties. They just don’t agree AT ALL about the value of the other’s economic philosophy.
Please explain clearly what you mean by “artificial”. Please be precise.
“Those sales prices are distorted and unsustainable”
Please explain clearly what you mean by ‘distorted and unsustainable’. Please be precise.
“distorted interest rates”
Please explain clearly what you mean by ‘distorted interest rates’. Please be precise.”
“bids up the prices of goods and services in a distorted and unsustainable manner”
Please explain clearly what you mean by ‘bid up the price in a distorted and unsustainable manner’. Please be precise.
You have repeatedly used terms without explaining what you mean by them. As yet you have demonstrated no understanding of the issues under discussion. You have simply repeated stock assertions without demonstrating that you even know what they mean.
It was my opinion in 2008 that the 2008 crash was a completely Keynesian/funny money phenomenon that would destroy Keynesianism once and for all.
After all, the Fed’s ability to manage the economy mainly comes from its ability to create booms and busts in the housing market. If housing enters a post-bubble slump, what’s left?
http://www.nytimes.com/2005/05/27/opinion/27krugman.html?_r=0
I used to think Keynesians were reasonable but misguided people. Now I think they are on the same level as O’Reilly, desperate and ready to say anything in defense of their precious statism as their narrative is exposed for what it is.
the real problem is that you completely lack any real understanding of any kind of economics, be it Keynesian, neoclassical or Austrian.
LK,
The notion of artificial demand is not without economic foundation.
Artificial demand is demand that arises by one or more people using violence and coercion to suppress the demand of other individuals. This has the effect of creating a demand that is not representative of all individual subjective values, but is rather representative of only some individual subjective values.
That is what “artificially” means within subjective value economics. Individusl subjective values are oppressed, and replaced by the state’s values.
“Artificial demand is demand that arises by one or more people using violence and coercion to suppress the demand of other individuals.”
….which is an ETHICAL argument (derived from one of the intellectually bankrupt Austrian ethical theories), NOT an economic argument,
Thanks for proving Phillipe right.
Philippe,
You should “clearly explain” ANYTHING before you demand anyone else “clearly explain” something to you.
You have not precisely explained your theory even when asked. You run away when questions are asked of you, or on the occasional time you responded to the questions with your own questions. In a previous thread there are something like 5 questions I asked from you that you did not answer.
You don’t answer other people’s questions, so why should anyone answer yours?
so what you are saying is that, for example, if the government taxes person A $100 and pays $100 to person B, when person B goes to buy goods, his demand is ‘artificial demand’ and doesn’t represent ‘individual subjective values’.
Because Violence!!!
That’s not an economic argument. It’s just your political ideology masquerading in pseudo-economic garb
“there are something like 5 questions I asked from you”
I don’t read a lot of what you write. It’s mostly garbage.
LK:
“.which is an ETHICAL argument (derived from one of the intellectually bankrupt Austrian ethical theories), NOT an economic argument,”
No, it is an argument concerning people’s actual actions. It is not an argument that it is morally wrong, per se.
You are seriously misguided if you believe any mention at all of one person initiating violence against another, is the exact same thing as saying it is morally wrong to do so.
All you’re doing is trying to justify your evasion of the economic consequences of the stuff you’re peddling, by pretending that your talk of “Keynesian policies” are somehow not initiations of violence.
That is all you’re doing there.
Philippe:
“so what you are saying is that, for example, if the government taxes person A $100 and pays $100 to person B, when person B goes to buy goods, his demand is ‘artificial demand’ and doesn’t represent ‘individual subjective values’.”
Right. Person A is not able to manifest their demand because they were stolen from. The resulting demand is artificial because it does not represent the demand of both A and B.
Claiming that the demand resulting from theft is not artificial, or is natural as demand resulting from cooperation, is just your political ideology masquerading in pseudo economic garb.
John,
you’re largely correct in your assessment, I’d just like to add that Austrianism is an older school so 75 years is cutting it short.
Both classic Keyenesianism and Austrian Economics have been on an upswing since 2008, (and other heterodox schools) unlike Keyenesianism though, I don’t think it was ever in favor (at least in America). It’s always been at the extreme end, with it’s ideas slowly being integrated into the mainstream.
“Right. Person A is not able to manifest their demand because they were stolen from.”
proof again that you are simply engaging in ideological moralizing, not economics.
Philippe:
“proof again that you are simply engaging in ideological moralizing, not economics.”
No, it is an assessment of what is actually taking place.
If you don’t like to read “stolen”, then use any word you want. It is the case that the demand preferences of the person whose money was taken cannot be revealed. He has wants and needs that the $100 could have acquired, but that $100 was taken from him.
You want to moralize economics by claiming that states doing this is moral and we should pretend and play make believe that the resulting demand is representative of the individuals whose money was taken from them.
-True, but only for a limited time. This is why inappropriate credit expansion can be so dangerous.
Re Tyson, Judge, 8ball:
What was the purity? How many times had it been stepped on. This should have been the real issue.
All of American drug laws are non sense. They are based on weight and servings but none of them are based on strength and purity, i.e. final effect
It is illegal to sell macadamia nuts packaged in a similar manner as crack rock. It is illegal to use household chemicals for unintended uses. You are right that the drug laws are nonsense but it is nonsense that final effect is somehow a more sensible justification. Would laws against prostitution make more sense if they were graduated by intensity of orgasm?
An uncaused, being-for-itself is the foundation of all human thought.
A really great article by Mr Henderson.
The most wonderful thing about (mostly) skipping over the comments under each post is that I know I’m not missing anything I haven’t read a million times before.
How many times have Roddis, Major Freedom, and the Lord Keynes rehashed their same tired arguments in pretty much exactly the same words in multiple different threads on this blog? Is this productively efficient?
I have to assume that all parties are getting something out of it.
I keep getting falsely accused in these comments of not knowing or understanding Austrian analysis. Further, I am expressly promoting a simplified but true explanation of Austrian analysis which anyone can steal and promote without attribution. If no Keynesian in the universe understands Austrian analysis as I insist, why don’t we say it all the time? If I’m wrong on that, correct me.
Finally, the papers to which I linked by Agnès Festré and Israel Kirzner are new to us I do believe. Based upon those papers, the analysis of economic calculation and “Wicksellian” natural rates of interest has not been exhausted by any means. Is discussing those issues a thought crime too?
Finally, who other than LK even makes an effort to engage Austrian concepts? He was cited and linked to as an authorty by the Columbia Law School folks who put on the lengthy series of lectures, part of the same series where Bob Murphy debated Mosler. Is there something wrong with refuting LK if he’s wrong?
I wil concede that LK’s arguments have been refuted over and over and over. It’s not my fault that he keeps making the same dumb and refuted arguments.
http://tinyurl.com/nngjk6l
bob,
“I am expressly promoting a simplified but true explanation of Austrian analysis”
No, what you promote is your “anarcho-capitalist” political ideology, dressed up in economicky-sounding language.
The problem is that you constantly confuse your political ideology with economics, and you don’t even understand the difference between the two.
Here is the gist of your confused argument:
(1) The ‘anarcho-capitalist free market’ results in the best possible economic outcomes.
(2) Economic problems such as depressions, unemployment, financial crashes and poverty are caused by ‘government interventions’.
Why?
(3) Errrrr……. because everything in the ‘anarcho-capitalist free market’ is voluntary!
I disagree that it is, but anyway, why does (2) follow from (3)?
(4) Because if it’s voluntary then people will get what they want and communicate information and everything will work well!!
Why will it work well?
(5) Because its voluntary! And not artificial or distorted!!
Why isn’t it artificial or distorted?
(6) Because it’s voluntary! And based on homesteading!
Why does ‘homesteading’ mean that there will be no economic problems, such as depressions, unemployment, financial crashes, poverty etc?
(7) Because it’s voluntary, and not artificial, and based on property rights, and there are no distortions!
Ok, but please actually explain why ancapistan does not have economic problems, such as depressions, unemployment, financial crashes, poverty etc?
(8) because its voluntary and not violent!
etc.
It’s just nonsense…. pure garbage. You start out by making an economicky-sounding argument, then you end up trying to justify it with silly ‘anarcho-capitalist’ ideological arguments that have nothing to do with economics at all.
Can you make me a scarecrow too?
ask Bob to give you an answer to the question: ‘Why?’ after (2).
Asked and answered repeatedly. Go away.
http://davidstockmanscontracorner.com/keynesian-myths-monetary-central-planning-and-the-triumph-of-the-warfare-state-part-4/
That is Stockman giving his faux “myths” about the Great Depression. You are not answering Philippe.
Quite apart from which Stockman’s nonsense is very impressive indeed:
“So the New Deal did nothing to help the domestic economy. “
The words of an hack and ideologue. His claim that the Great Depression was “over” by 1932 are a joke.
That was the year that 1,453 banks failed.
there isn’t a single reference, source, or piece of data in that entire series… Stockman seems to just be writing whatever he feels like.
LK,
You haven’t shown how those are “faux myths”.
LK,
The argument that the New Deal did “help the economy” are the words of a hack and ideologue.
Initiating violence and coercion does not help the victims. You are just spewing the ridiculous ideology that violence against innocent people is a magical way to improve their lives.
More dressing up of bankrupt libertarian “ethics” as economics.
“You haven’t shown how those are “faux myths”
Stockman hasn’t shown how anything that he has written is factually true. It’s just a long monologue with absolutely no supporting evidence.
LK,
The fact that x number of banks failed is not sufficient proof against the theory that a depression has ended.
You are contradicting yourself, since you have previously defined depressions in terms of output, NOT bank failures. You can’t even keep your definitions consistent.
lol.. So in 1932 GDP increased?
Your knowledge of history is superb. Where is your nobel prize, M_F?
LK,
LOL! So when I point out your shifting definitions of depression, all of a sudden I am making a positive claim as to what GDP growth was in 1932?
Hahahahaha you’re such a hack!!!
Philippe,
Please explain how anything Stockman wrote, contradicts the historical record.
LK,
Stockman’s point is not off the wall absurd as you seem to be suggesting.
The GDP growth rate bottomed out in 1932.
http://www.economics-charts.com/images/gdp-1929-2004-semilog.png
I hope it goes without saying that I do not endorse GDP as a valid measure of standard of living.
No, M_F, your GDP data shows GDP FALLING in 1932.
Too bad you cannot read graph.
“You are contradicting yourself, since you have previously defined depressions in terms of output, NOT bank failures.”
And I stick to my definition of recessions/depressions in terms of real output. I was not repudiating or changing it above — just pointing to bank failures as ONE reason why the economy did not end in 1932, despite Stockmans’ nonsensical claim.
“The words of an hack and ideologue. His claim that the Great Depression was “over” by 1932 are a joke.”
LK, this is wrong. Stockman didn’t say it was over by 1932. He clearly said it was over by early summer 1932.
And Stockman didn’t ignore the bank failures. That was a big part of his article:
“Indeed, a single startling statistic puts paid to the whole New Deal mythology that FDR rescued the banking system after a veritable heart attack: to wit, losses at failed US banks during the entire 12-year period ending in 1932 amounted to only 2-3 percent of deposits. There never was a sweeping contagion of failure in the banking system.”
“Indeed, the “Hoover recovery” would be celebrated in the history books even today if it had not been interrupted in the winter of 1932-1933 by a faux “banking crisis” which was entirely the doing of President-elect Roosevelt and the loose-talking economic statist at the core of his transition team, especially Columbia professors Moley and Tugwell.”
Stockman seems to be correct that the percent of deposits lost was around that level: https://www.fdic.gov/bank/historical/brief/brhist.pdf (See Table 5 on page 21)
I can’t find a good source for per month bank failures. Figure 3 here (http://www.cliometrics.org/conferences/ASSA/Jan_95/Mason.shtml) has a graph showing per month numbers, but I don’t know the accuracy of it: http://www.cliometrics.org/conferences/ASSA/Jan_95/mason.fig-3.jpg. If it is accurate, then Stockman doesn’t seem to be wrong. It was highest in January, dropped significantly, then rose a bit until early summer, dropped during the summer months, and then stayed steady until a jump in December.
So a significant number of the 1,453 bank failures were during a time when Stockman agreed that the recovery was not there yet and when he put the blame on Roosevelt in December. Furthermore, look at the numbers compared to 1931 and 1930. There were 1,350 bank failures in 1930, 2,293 in 1931, and then 1,453 in 1932. If you look at the deposits lost, it’s actually less in 1932 than in 1930 ($237,359 compared to $168,302). When you take both these into account, I think it’s pretty clear that Stockman at least has a point. I don’t agree that the depression was over yet (I think Hoover’s policies were still pushing that back), but I do think it’s quite possible the economy was starting to recover.
The deposit losses are in thousands of dollars by the way. I think that’s pretty obvious, but isn’t clear at all by the way I wrote that.
LK,
“No, M_F, your GDP data shows GDP FALLING in 1932.”
No, it shows it starting to rise in 1932.
Where do you see it starting to rise?
“You are contradicting yourself, since you have previously defined depressions in terms of output, NOT bank failures.”
And I stick to my definition of recessions/depressions in terms of real output. I was not repudiating or changing it above — just pointing to bank failures as ONE reason why the economy did not end in 1932, despite Stockmans’ nonsensical claim.”
Bollocks.
If you define depressions in terms of GDP, then you can’t then claim there is or is not a depression because x number of banks failed in one year.
Those are two different definitions of depression.
If GDP were growing 10% each year, and in one year a very large number of banks failed, then according to your definition of depression, this economy is not in depression. The bank failures do not play a role in defining whether or not there is a depression.
Just admit you misspoke, that you just wanted to argue the economy was still in depression, and that the bank failures is just a not well reflected supporting premise, that if you had to relive the past, you probably would have mentioned GDP, not bank failures.
But wait, did you purposefully redefine depression because according to GDP, which started to rise around 1932, the economy was not in depression, which means according to your definition in terms of GDP, you would be in the awkward position of having to conclude what Stockman concluded?
Your stupidity is impressive.
A situation in which there is massive bank failure and loss of deposits, with a corresponding fall in demand is PRECISELY a situation you’d expect in a recession/depression.
“Your stupidity is impressive.
A situation in which there is massive bank failure and loss of deposits, with a corresponding fall in demand is PRECISELY a situation you’d expect in a recession/depression.”
LK, you said “His claim that the Great Depression was “over” by 1932 are a joke.” and then gave the bank failures for the year. Please quote where he said the Great Depression was over by 1932.
That monthly banking failure graph I posted before seems to have been approximately accurate. Here’s an interesting fact: 43% of the bank failures and 48% of the deposits in failed banks in 1932 occurred during January, February, and December, times when I’m assuming Stockman would not say we were recovering (or perhaps even starting to recover) during or placed the blame on FDR. http://books.google.com/books?id=I9ASJle80XAC&pg=PA111#v=onepage&q&f=false
I also found an interesting link for other possible improvements in mid to late 1932: https://bea.gov/scb/pdf/1932/1132cont.pdf
Look at the “Business Indicators” on page 2. Almost everything seems to have been going down until about half way through the year. Then, almost everything goes up – industrial production, factory employment, factory payrolls, freight car loadings, wholesale prices, value of exports, value of imports, and building contract awards (adjusted). As far as I can tell, based on their graph there was no other period since the great depression began (late mid-1929) where so many indicators went up.
The increase seems pretty small. It might not have continued, even if what Stockman complained about didn’t occur right after. But he seems to be mainly correct on his numbers, so there weren’t any “faux “myths”” as far as I can tell.
I’m still waiting for your evidence of this “claim”: “His claim that the Great Depression was “over” by 1932 are a joke.” I’m happy to admit that Stockman was completely wrong, which I will do if you provide evidence of him claiming this. Otherwise, LK, you were wrong.
LK:
“A situation in which there is massive bank failure and loss of deposits, with a corresponding fall in demand is PRECISELY a situation you’d expect in a recession/depression.”
Bank failures do not necessarily lead to falling demand. Bank failures can result in higher demand as a bad bank is taken over by better managers.
All I claimed is that you switched definitions of recession.
GDP according to the chart I posted began rising around 1932. According to your initial definition of recession, Stockman seems to be right that the “depression” was over.
In 1929-1933, banks failures did generally lead to loss of deposits. This is a historical fact.
But we know you have serious problems with empirical reality don’t we.
“GDP according to the chart I posted began rising around 1932.”
Around 1932? lol.
Tell the truth: GDP starts to rise ****in 1933****
GDP dropped in 1932 and 1933. There doesn’t seem to be any available estimates for quarterly or monthly numbers, so we don’t know for sure if GDP started increasing in late 1932 or in late 1933 or not at all during this time period.
LK:
LOL, your position has previously been that the depression did not end until 1945.
You are now trying to “win” by claiming that GDP started rising in 1933 and not 1932. You’ve contradicted yourself.
I say it started rising in 1932, but even if you say 1933, you’re still changing your story.
Philippe,
You have confused yourself into believing that your false understanding of the argument you are trying to refute, is equivalent to the argument itself.
Your 8 part straw man is your own pure garbage, and has nothing to do with what you think you are successfully refuting.
no, your comments above demonstrate that my characterization is accurate.
No, they do not. An inaccurate series of claims cannot be made accurate by merely stating that they are accurate.
You just don’t understand Rationalism. You don’t understand the grounds and the deductions. You only perceive circles because your mind is going in them trying to make sense of it.
I never implied or suggested anything of what you wrote in that 8 part post full of garbage.
Roddis doesn’t know basic Austrian or economic concepts. No person who does would say — as he does — that housing prices in the 2000s bubble or goods prices all throughout a boom were “market clearing prices”.
Did roddis ever ask Bob Murphy why he’s rambling nonsense on this is wrong? Presumably not. Roddis does not care he is an ignoramus.
LK,
You don’t understand basic Austrian concepts.
Roddis did not argue that he believed housing prices during the boom were market clearing prices. He was challenging your flawed understanding of market clearing prices.
Cherry picking an Austrian economist’s writings and juxtaposing it against what Roddis said, as if that is sufficient grounds for concluding that Roddis does not understand Austrian economics, is the hallmark of a hack.
“Roddis did not argue that he believed housing prices during the boom were market clearing prices”
Yes, he did. You are a liar.
No, he did not. He was challenging your understanding of it by asking that question, rhetorical or otherwise.
It makes no sense to claim that he rejects the term market clearing prices, and then claim he thinks a set of prices are market clearing prices.
It does when roddis is clearly confused, incoherent, ignorant and incompetent.
OK guys, time to break it up. I was traveling and couldn’t really monitor this very well, but you are all in violation of the Geneva Convention at this point.
That just has to be it, huh? No way you made a mistake, huh?
In the context of housing:
“Explain. And while you are at it, explain why unsustainable bubble prices are not “market clearing prices” before the bubble pops.”
http://consultingbyrpm.com/blog/2014/07/krugmans-kontortions-on-france.html#comment-730963
In the context of booms/general expansions in the business cycle:
“As I’ve said before 387 times, MARKET CLEARING PRICES EXIST ALL THROUGHOUT THE UNSUSTAINABLE BOOM until that moment when the bust begins.”
http://consultingbyrpm.com/blog/2014/04/austrian-business-cycle-theory-surprisingly-useful-even-among-its-critics.html#comment-434540
“I still maintain that economic calculation has absolutely nothing to do with ‘a price vector that will clear all markets’ and neither does the Hayek quote you constantly present. A 20 year unsustainable Keynesian boom would have had ‘market clearing prices’ for 20 years right up until the bottom drops out.”
http://mikenormaneconomics.blogspot.com/2013/01/lord-keynes-debunking-austrian.html?showComment=1359199941427#c5328116548878528365
His plain confession that he does not understand the very concept of market clearing prices:
“For the record, I don’t care whatsoever about “market clearing prices”.”
http://consultingbyrpm.com/blog/2014/07/krugmans-kontortions-on-france.html#comment-731147
“I do not like the term “market clearing prices”. I don’t use it and I do not think it is particularly helpful in understanding reality. When I see the term used, my reaction is always “WTF are you actually trying to say”?”
http://mikenormaneconomics.blogspot.com/2013/05/daniel-little-what-about-marx.html?showComment=1369144674917#c9135395
If there can be no market clearing prices in a boom per your definition and there is an empirical lack of them during the bust, what good is the term?
Your obsession with my understanding (or lack thereof) of this concept is pathetic. My point is that the use of the term is confusing in a message that’s really directed at other Austrians and not to you.
You, LK, are going to carry on like you do regardless.
“If there can be no market clearing prices in a boom per your definition and there is an empirical lack of them during the bust, what good is the term? “
Just because market clearing in individual markets is rare and brief, it does not follow the term is “useless” or not meaningful.
Mises’s “final state of rest” condition NEVER happens in the real world, so is the “final state of rest” “useless” or not meaningful? lol.
But why don’t you ask Bob Murphy, or an actual Austrian economist, what the role of a flexible wage and price system, which tends towards market clearing, is in Austrian economics? Too lazy?
Or READ the relevant passages in the RELEVANT Austrian books and articles as I have assembled them here. Too lazy?
Note the following source materials at Columbia Law School:
Related Materials
Anon. (A.K.A. “Lord Keynes”), 2012, Posts on the Origins of Money, Social Democracy for the 21st Century: A Post-Keynesian Perspective
http://www.modernmoneynetwork.org/seminar-1-history-of-debt.html
I suppose we should ignore that too.
You should all read the materials presented at Columbia regarding “Money and Public Purpose”. It ought to scare the hell right out of you. The idea that one can be essentially a professor of Keynesianism and make big money while clueless about the NAP, Austrian analysis and the US Constitution ought to scare the hell out of you.
http://www.modernmoneynetwork.org/seminar-1-history-of-debt.html
Note that Krugman promoted Daniel Kuehn’s paper on the 1920 depression. Daniel Kuehn conceded to me that his paper was consistent with the Rothbardian narrative of that event.
http://bobroddis.blogspot.com/2012/08/daniel-kuehn-provides-factual-basis-for.html
Stockman’s analysis is similar to mine and Rothbard’s while looking at the later period.
Huzzah ! More pointless bickering about who does and who doesn’t “get” Austrian economics. Yay! This is productive. We’re all learning, we’re all challenging our beliefs, right? Cool!
It is absolutely disgraceful. I admire Dr. Murphy’s patience with these people.
Not so admirable. As John observes, LK can correctly summarize the idea on his blog. Murphy could leave a response to that either here or there, and settle Bob Roddis’s claim once and for all. That though would require criticizing his fans.
You seem to think that I have never chimed in before on “market clearing prices.” I have. I hope you don’t answer, “But no, that can’t be, because otherwise LK and Roddis would have stopped arguing the point.”
I don’t think I’m “arguing the point” about “market clearing prices”. I don’t care for the term and that makes me an idiot. I respond here and there to these endless attacks when I’m in the mood. This particular line of attack is just deflection and misdirection about my comments regarding Krugman. I would much prefer to discuss the Woods/Horton interview and Stockman’s views on Keynesianism funding the war state. I’ve tried (and failed) to move the discussion in that direction.
You could simply state, you think LK’s summary a good one, or explain why it is not. That would end John’s suspense at least.
You can stop this debate easily, Bob Murphy.
So why not clear up the point for Roddis:
Does the Austrian theory of how economic coordination is achieved in both ideal free market systems and how it should be achieved in modern hampered market systems involve a great emphasis on a flexible price and wage system, in which prices and wages have a tendency to be adjusted towards market clearing levels, even if the whole system never reaches Mises’ final state of rest?
Yes or no? A response will stop any further discussion like this on your blog.
Does the Austrian theory of how economic coordination is achieved in both ideal free market systems and how it should be achieved in modern hampered market systems involve a great emphasis on a flexible price and wage system, in which prices and wages have a tendency to be adjusted towards market clearing levels, even if the whole system never reaches Mises’ final state of rest?
A “great emphasis”? Yes.
So drop it and go away.
Hahaha!!
So all these years: your laughable claims that your Hayek quote has nothing to with a flexible price and wage system, in which prices and wages have a tendency to be adjusted towards market clearing levels, is revealed to be nonsense.
In fact, a great deal of your claims over the past few years have just collapsed like a house of cards.
Nothwithstanding what Roddis has written, I’m pretty sure Austrian theory has withstood these spitballs you’ve flinged the past few years.
1. Mark up prices are flex prices because cost prices are flex prices. They can and do respond to changes in demand, provided the change in demand is large enough and sustained enough. Austrians such as Bohm-Bawerk and George Reisman have written extensively on pricing based on costs, the latter showing how cost based pricing is in fact a consequence of traditional supply and demand pricing, and as such there is a reasonable argument to be made that cost based pricing belongs to the canon of Austrian theory. The presence of disagreements between Austrians on this score is not sufficient evidence that cost based pricing is a phenomena that Austrian theory proper either contradicts or fails to take into account.
2. One of your original attempts to salvage Keynesianism from the contradictory wreck that it is, was to insist that the economic calculation critique only applies to communist economies. That claim was of course refuted.
3. Your attempt to portray Austrian economics as a political/normative ideology, failed.
4. Your attempt to disprove ABCT by pointing to a lack of an “s” after natural interest rate, was actually educational as much as it was amusing. I still think we can understand “the” natural interest rate as a collection of interest rates resembling a normal distribution, perhaps with some kurtosis and skewness. But this was Sraffa’s criticism, not yours, so meh.
5. You act in accordance with anarcho-capitalist ethics. You yourself do not tax people, or borrow from people, spend, and thehn tax people to pay the debt back. You yourself do not print money, spend it on interest bearing securities, and call it monetary policy. You yourself do finance your deficits by printing money and call it fiscal stimulus. You yourself do not do any of the things you claim is moral for government to do, because you know it is illegal and the government regards you doing the same activity as immoral. This is the fundamental contradiction of statist ideology. Anarcho-capitalists do not suffer from that action-belief contradiction.
LK, you cannot even recall when I have made concessions to your attacks years ago. Drop it. Go away.
http://consultingbyrpm.com/blog/2013/01/krugman-government-spending-surged-if-it-helps-my-case-otherwise-its-a-dirty-right-wing-myth.html#comment-56952
(1) mark-up prices are not the right type of market clearing prices required in the Austrian theory for economic coordination. In fact, mark-up prices still have a strong relative downwards rigidity and cannot be market clearing prices in the proper sense required in the Austrian theory of economic coordination.
Simply redefining them as you do as “flexprices” because they tend to move upwards as unit costs increase is a laughable tactic that reeks of desperation and refutes nothing.
Finally, you already lost this point when you showed a graph that proved that inflation has been the norm in virtually every recession since WWII, which you then proceeded to misread. lol.
(2) Wrong. I said the **original** socialist economic calculation debate applies to command economies. That is correct.
The Austrian arguments that Keynesian economics supposed causes inter-temporal miscoordination or miscalculation are flawed and unconvincing.
(3) Bizarre straw man. Austrian praxeology can be considered as pure economics, yes. But it is wrong on economic grounds.
When Austrians turn to ethics they try and defend certain ethical theories which are straightforwardly flawed and wrong, and which commit well known logical fallacies.
(4) You’ve lost this point long ago, when you conceded that no Austrian yet as ever reformulated the ABCT without the natural rate or its functional equivalent:
“Yes, there is a rather large burden on Austrians to publish a more modern exposition of ABCT that takes into account the assumption of multiple natural interest rates.
As it stands, it is incomplete in its details”
http://socialdemocracy21stcentury.blogspot.com/2011/09/abct-without-unique-natural-rate-of.html?showComment=13167803224
If a natural rate or its functional equivalent is untenable, then ALL published versions of ABCT are fatally flawed. No doubt you this causes you to fly into a rage and invent the nonsense we see above.
(5) is laughable, bizarre, incoherent nonsense.
No, I reject natural rights ethics and Hoppe’s argumentation ethics. I do not tax people or print legal tender, because that is the proper role of government to do these things in my ethical theory. There is no contradiction.
LK:
(1) ALL prices are “the right type of market clearing prices as required in Austrian theory for economic coordination.” Cost based pricing is in fact an outcome of marginal utility theory. Austrian theory does not assert that prices must immediately respond to every change in demand. Bohm-Bawerk wrote extensively on how costs play a role in the pricing of some goods. The reason why it is not as explicit as direct supply and demand, or direct marginal utility, in Austrian literature is because of the historical times Menger, the founder, was living in. At that time, manufactured goods that are very prevalent today, were more modest in supply back in the 1860s, when economists typically focused on “commodities” pricing only. But as Bohm-Bawerk was able to anticipate, there are alao goods priced according to costs. As I said, cost bases pricing IS IN FACT a component of Austrian price theory proper. In terms of economic coordination, cost based pricing is explainable using traditional Austrian principles of marginal utility and supply and demand. You are incorrect to claim that Austrian theory can only handle commodity type goods whose pricing at any given time is direct supply and demand. But as Reisman explained, even these prices are determined in the long run by costs. In other words, costs are the long run determinant of ALL prices if Austrian principles are consistently applied. Yes, there is disagreement on this.
(2) Even the “original” economic calculation critique was applied by Mises to “hampered market economies.”. That is what ABCT is all about. The economic calculation arguments as applied to Keynesianism are very much convincing, and you have not exposed any flaws in it that would make its argumentative force against the destructive consequences of Keynesian violence any less valid.
(3) You have not shown how praxeology is “wrong on economic grounds.” Claiming you have done so would of course itself be an action, where you are utilizing scarce means (body, goods) to achieve a goal (refuting what cannot be refuted), and all the other laws of economics as deduced in praxeology would apply with full force and validity to your behavior. You alao have not shown any flaws in the ethical arguments when Austrians turn to ethics. You have never come even close to exposing any flaws in anarcho-capitalist ethics for example. No, your fears and resentment and uncertainties do not constitute an exposure of flaws. You have also not shown anarcho-capitalism to suffer from “well known logical flaws.”
(4) A point cannot be “lost” about the absence of an “s” after natural interest rates, when I never claimed every instance of natural interest rate contains an s in the literature. It does not impair ABCT whatsoever. It is even less of a change than the change that resulted in you calling yourself a “Post” Keynesian, as opposed to a Keynesian. You did not throw the baby out with the bath water, don’t expect me to.
(5) Thank you for proving my point about the contradiction in your ethics. You behave, in your actions, how you approach other people’s bodies and property, as an anarcho-capitalist. Yes, we get it that you would regard it as IMMORAL for you or I to ACT the way you say government agents ought to act. Your ethics are not univeralizable, which means what you believe in is not an ethic for humanity, but two different ethics, one for one group, and another for another group, where if one group did what the other did, they would be acting immorally, but when the other group does the exact same actions, they magically act morally. Your use of the phrase “proper role” gives that all away. Proper? Why is it “proper” for the same action to be immoral to some, but moral to others? That is not a proper ethic for humanity. That is just a fascist ethic. Your ethics are fundamentally at root based on a rank contradiction. The same actions are to you both moral and immoral. No, saying this contradiction is “proper” doean’t make it go away. In terms of your actions however, you behave as an anarcho-capitalist. That is fact. I don’t care if you say you don’t buy into it. You’re lying so badly that you actually believe your lies are truth. You believe in a lie.
(1) is a long red herring comment that refutes NOTHING I said. If you think that cost-based prices are market clearing prices in recessions that clear product markets, then explain how they can do this by mostly RISING in every recession since WWII.
You are saying that such market clearing prices were prices that were *higher* than before, which entails that there was excess demand in recessions, a totally laughable idea contrary to reality.
You have lost. The loss is utterly clear in your total inability to address any substantive point here.
(2) All published forms of ABCT are wrong, since they ALL rely on the single Wicksellian natural rate. They are refuted on this point alone, though they have many other problems too. Look at your pathetic inability to even address this point.
(3) praxeology is wrong on both economic grounds e.g., free trade and epistemological grounds.
(4) You already lost this point:
“Yes, there is a rather large burden on Austrians to publish a more modern exposition of ABCT that takes into account the assumption of multiple natural interest rates.
As it stands, it is incomplete in its details”
http://socialdemocracy21stcentury.blogspot.com/2011/09/abct-without-unique-natural-rate-of.html?showComment=13167803224
Where are the published versions of ABCT without the natural rate or its functional equivalent? You can’t answer of course, and it clearly leaves you high and dry. No doubt you are extremely angry about this, but pathetic evasions of this point only show how you are incapable you are of giving any reply here.
(5) continues to a long bizarre and incoherent rant of no interest.
“Why is it “proper” for the same action to be immoral to some, but moral to others”
Is it moral for you to paint my house green? No. It is moral for me if I wish to, because it is my property. But, NO!!, according to your hare-brained rambling, that must prove that your l ethics is not univeralisable.
In fact, you have no idea what “universalisable” even means in the context of ethics here. You are clueless.
In fact, the maxim “do not usurp the proper functions of government” is “universalisable,” just as “do not paint your neighbours’ house without his permission.”
LK:
“(1) is a long red herring comment that refutes NOTHING I said.”
Sure it does. You falsely claimed markup prices are “not the right kind of prices” as required by Austrian theory of economic coordination. The truth is that ALL prices are “the right kind of prices” as required in Austrian theory for coordination. Austrian theory of prices and coordination does not require absence of cost based prices.
“If you think that cost-based prices are market clearing prices in recessions that clear product markets, then explain how they can do this by mostly RISING in every recession since WWII.”
Mostly? Since WW2 only? Are you admitting your theory cannot account for certain episodes in history? That your theory is incomplete?
Inflation of the money supply brought about by central banks makes prices rise over time. And recessions are not solved by inflation. Inflationary recessions can and do exist. We’ve been living in one.
Market clearing prices do not require or imply temporally falling prices necessarily. In the absence of central banks, recessions would likely otherwise almost always consist of temporally falling prices. Prices fell in the early 1930s and again 2008-2009. But falling prices do not hold a monopoly on economic coordination
“You are saying that such market clearing prices were prices that were *higher* than before, which entails that there was excess demand in recessions, a totally laughable idea contrary to reality.”
Rising prices do not necessarily imply excess demand. Excess demand is a tool of thought. It is not directly observable. Rising or falling or stable prices alone cannot tell us whether there is inadequate or excess demand.
Besides, where did I say what you claimed I said? Quote me please.
“You have lost. The loss is utterly clear in your total inability to address any substantive point here.”
No, I did not lose. I won. You have lost.
“(2) All published forms of ABCT are wrong, since they ALL rely on the single Wicksellian natural rate.”
No, they do not theoretically or logically “rely” on one interest rate. That is just how they were explained. And why limit to what is published in journals or books anyway?
“They are refuted on this point alone, though they have many other problems too.”
No, they are not “refuted on this point alone.” You have not addressed why adding an s to the word “rate” cannot otherwise have ABCT saying the same thing and explaining why central banks cause recessions as before.
“Look at your pathetic inability to even address this point.”
Please explain how my addressing that point every time you bring that point up, constitutes me not being able to address the point.
You have likely confused me addressing a point, with me accepting what you might believe follows from that point. I don’t have to accept your claim as to what follows from it, in order for me to still “address” it.
“(3) praxeology is wrong on both economic grounds e.g., free trade and epistemological grounds.”
Again, you have not shown how praxeology is “wrong on economic grounds.”. Nor have you shown how it is wrong ” on epistemological grounds” either.
You only WANT and NEED it to be wrong because at some level you know it refutes your entire economic and epistemological worldview.
“(4) You already lost this point:”
“Yes, there is a rather large burden on Austrians to publish a more modern exposition of ABCT that takes into account the assumption of multiple natural interest rates.”
“As it stands, it is incomplete in its details”
Again, I don’t see how I can lose that point when I never claimed orthodox ABCT has s’s attached to every occurence of the word “rate”
“Where are the published versions of ABCT without the natural rate or its functional equivalent?”
There is no real pressing need to add an s every time the word rate occurs. The Sraffa critique just isn’t as significant as you believe it is. It is really just a grammatical change.
You can save Human Action in MS Word, then use the search and replace function by replacing all instances of “natural interest rate” and phrases like it, with “natural interest rates” and phrases like that.
Should take only a few minutes.
If I were to then upload it to this site, then it would satisfy your criteria of “published ABCT where multiple rates is used.”
“(5) continues to a long bizarre and incoherent rant of no interest.”
Not an argument.
“Why is it “proper” for the same action to be immoral to some, but moral to others”
“Is it moral for you to paint my house green? No. It is moral for me if I wish to, because it is my property.”
But those are two different things. A person painting his own house is one thing, and a person painting another persons’s house is another thing. To utilize moral arguments then, we must ask whether it is moral or immoral for me to paint my house green, and whether it is moral or immoral for me to paint your house green.
Your statist ethics is, using an analogy, like saying it is immoral for a person to paint another’s house, but moral for a person with a government badge to paint another’s house.
Or, using another example, perhaps more easily understandable: Your ethics claims it is immoral for a person to tax another person, but it is moral for a person with a government badge to tax another person.
The same action is moral or immoral depending on who or what the person works for.
Your example is not a correct analogy, because you are referring to two different actions, a person painting their own house, and that person painting another person’s house. I am talking about the same actions against the same people. Moral for some, immoral for others.
“In fact, you have no idea what “universalisable” even means in the context of ethics here.”
No, YOU don’t understand what universalizable means in the context here.
You don’t grasp how statism is not universalizable, whereas anarcho-capitalism is universalizable. It is impossible for everyone to be a taxer. But it is not impossible for everyone to be a free trader.
You are completely oblivious to basic principlesof ethics.
“In fact, the maxim “do not usurp the proper functions of government” is “universalisable,””
What you call the “proper” ethics of government actions is NOT universalizable.
When you start with a non-universalizable assumption, then you cannot claim that a deduction from it is universalizable.
“just as “do not paint your neighbours’ house without his permission.”
No, your previous maxim is not universalizable “like” this one here. Yes, this one here is universalizable. But statist ethics are not.
(1) no, MF. You claim that cost-based prices are flexible enough to clear markets in recessions. This is nonsense. In fact, they have a relative downwards rigidity and they CANNOT be falling to clear product markets in most recessions by inducing greater demand in recession, because they mostly RISE.
You are refuted by empirical reality.
No doubt you are angry and frustrated that you cannot answer this point. You are refuted.
(3) here you effectively admit there are no published versions of ABCT without the natural rate.
You have confirmed my point and confirmed that all published versions are flawed.
(3) = (4)
“But those are two different things. A person painting his own house is one thing, and a person painting another persons’s house is another thing. etc”
No refutation of what I said.
The painting of the house is the same action in both instances. It is moral for the owner but not the neighbour without permission.
Exactly analogous to the government printing money, and a private citizen wrongly usurping the government’s role by printing money.
Both examples are universalisable.
LK:
“(1) no, MF. You claim that cost-based prices are flexible enough to clear markets in recessions.”
No, that is a straw man. I never said markets actually clear, and in fact have been explicit in mentioning that markets only tend to clear.
Cost based prices can and do adjust to changes in demand. They are flexible. They are not rigid. They change. A reduction in demand, provided it is allowed to fall and the fall is allowed to be sustained, costs tend to fall and cost based prices tend to fall.
“In fact, they have a relative downwards rigidity and they CANNOT be falling to clear”
No, they are not rigid. Prices that actually fall are not rigid prices. Cost based prices do fall, provided they are allowed to fall and not stopped by central banks.
“product markets in most recessions by inducing greater demand in recession, because they mostly RISE.”
That is because of inflation from central banks. That has nothing to do with any objective nature of cost based prices not capable of falling.
“You are refuted by empirical reality.”
No, you are refuted by empirical reality.
The whole reason central banks target a rising price inflation rate is precisely because in the central bank’s absence, prices would fall. The whole rotten Keynesian dogma concerning “deflationary death spirals” is a fear that prices will fall in an otherwise unhampered market WITHOUT Keynesian “stimulus”.
You are contradicting the very foundation of your Keynesian theory. Keynesian theory advocates for government stimulus and inflation of the money supply precisely because prices in general would otherwise fall.
You are refuted totally and completely.
“(3) here you effectively admit there are no published versions of ABCT without the natural rate.”
Here you admit that adding an “s” to each instance of the phrase “natural interest rate” would make orthodox ABCT theoretically valid.
“(3) = (4)”
Nope. (4)=(4) and (3)=(3).
“But those are two different things. A person painting his own house is one thing, and a person painting another persons’s house is another thing. etc”
“No refutation of what I said.”
Your response is not relevant to what I said. It doesn’t even matter if anything said after what you responded with, refutes it or not. Your response does not counter my argument that your ethics are contradictory.
“The painting of the house is the same action in both instances.”
No it isn’t. Me painting my house is not the same action is me painting your house.
“It is moral for the owner but not the neighbour without permission.”
You are not comparing the same thing. You are talking about two different things in an attempt to justify your belief in two separate ethics.
Your ethics are not universalizable.
“Exactly analogous to the government printing money, and a private citizen wrongly usurping the government’s role by printing money.”
No, it is not exactly analogous at all. What you call “usurping the government’s role” is nothing but a repetition that the same action is moral for the state and immoral for everyone else. The state can tax Mr. Smith, but it is immoral for anyone else to tax Mr. Smith.
“Both examples are universalisable.”
No, they are not. “Taxing is moral” is not universalizable.
“Richie”: Dr. Murphy patiently allows the anonymous LK and Philippe to defame me while I use my real name. It doesn’t bother me if I can respond in kind. If you don’t like political debate, why not visit a blog that discusses knitting and recipes?
Personally, I enjoy MF’s long encounters with the likes of LK and Philippe. If I’m not in the mood, I just don’t read them and find something else to do. Is your mom holding your face to the screen and making you read all of MF’s comments?
“Richie”: Dr. Murphy patiently allows the anonymous LK and Philippe to defame me”
hypocrite.
Childish perhaps but what about it is hypocritical?
“Bob Roddis”: Get a thicker skin and ignore trolls. BTW, I don’t even read M_F’s comments. I read them long ago, and he writes nothing new. Same as you.
Personally, I enjoy MF’s comments. In fact, the more exchanges he has with Philippe on a particular day, the better the day.
Richie, it is because I see the same criticisms.
I would just like to state for the record that these pissing matches are cringe-worthy. Anyone making personal attacks (X doesn’t understand Y) rather than critiquing the idea espoused deserves condemnation for the sake of civility, productive discussion, and enlightenment. If your comment revolves around mentioning the name of another commenter, you’re doing it wrong.
It’s completely understandable to be frustrated by an opposing viewpoint, particularly when we can’t even agree on definitions and instead talk past each other. It’s a mistake to yield to that frustration and lash out. It’s much more acceptable to admit frustration and try to refute the viewpoint on its own terms, or (even better) to restate the opposing viewpoint in one’s own terms and refute that.
Frankly, I prefer Rogerian argument and believe widespread adoption can crash the market for cringe. Reminding ourselves on how much we agree — goals, foundational concepts, definitions, etc. — can reduce the temptation to lash out personally or tribally and instead promote incremental convergence at the margin. We can also discover narrow foundations where we must simply agree to disagree — for example, regarding the legitimacy of state compulsion against its citizens’ interests.
Less tribe, more vibe. Peace.
After we’ve been Mau Maued by the warmongers on new foreign adventures and our views completely suppressed or distorted by the media and academia, the best course of action is to bend over and ask them to hit us again. Harder.
What Would Gandhi Do?
First they ignore you, then they laugh at you, then they fight you, then you win.
Marginalization and persecution are indeed frustrating. Don’t be distracted or tempted into unpersuasive reaction. Hold the course to see the finish line.
Bob Roddis said
>>Look, LK: We have a standoff here. You go to the public with your “ABCT DEPENDS upon a SINGLE Wicksellian Natural Rate of Interest” and I’ll stick with my “LK and Keynesians have no understanding whatsoever of the concept of economic calculation”.<<
How is that a standoff? LK made a claim. It is either right or wrong. If he is right then he seems to understand the theory at least that far. If he is wrong here is your chance for vindication.