07 Feb 2012

Potpourri

Economics, Shameless Self-Promotion 28 Comments

* Mario Rizzo is clearly not one of us. He writes, “Over the past two years I have been reading more than I ever dreamed about rationality in economics, especially in the standard neoclassical theory of choice. I have done this because I want to get at the root of the controversies concerning whether people’s behavior is, in particular contexts, rational or not.” Mario, if everybody spent two years reading up on a field before pontificating, the economics blogosphere would come crashing down. What would Kant think of your antisocial behavior?

* A nice presentation from David R. Henderson on free-market fallacies. My favorite part is where he asks the students what types of monopolies bother them, and David is expecting them to list things monopolized by the government. One kid says, “Airlines!” and David basically says, “No, that’s not what bothers you, airlines have been deregulated.” (I love David like an uncle, by the way.)

* A nice video by Tom Woods on the wit and wisdom of Rick Santorum. (I love Tom like a brother, by the way.)

* A nice post from Scott Sumner blasting Keynesians. (I love Scott like a customer service representative, by the way.)

* A new Voluntaryist website.

* Even I don’t have the time to watch this raw footage of an interview a guy did of me, for a documentary on the Panic of 2008. But some of you may be more bored than me.

* I’m kind of a big deal. I intend to answer the most popular questions next week.

28 Responses to “Potpourri”

  1. RPLong says:

    Imagine what Rizzo’s post would have looked like if he had exposed himself to Mises’ definition of rationality from Human Action.

    It never ceases to amaze me that people continue to make arguments in favor of the idea that mankind is not inherently rational. All of these arguments boil down to “People don’t make the same choices as I do, even though I have really, really good reasons for making my choices! What’s wrong with them???”

    His apple/orange/pear example is the worst. Suppose I prefer a gold coin to a gallon of gas, but I prefer a gallon of gas to a few bushels of peaches. Can we seriously suggest that that my preference *must* be gold coin over peaches? What if the reason I preferred the gold coin to the gallon of gas was that I wanted to use the coin to buy some peaches?

    • Gene Callahan says:

      “Imagine what Rizzo’s post would have looked like if he had exposed himself to Mises’ definition of rationality from Human Action. ”

      Do you have any idea who Rizzo is, RP? He knows Human Action far better than you do! For a number of years he was Rothbard’s golden boy.

      “His apple/orange/pear example is the worst.”

      Except you didn’t even understand it, since he wasn’t saying what you think he was saying, and your example is a jumbled mess.

    • Gene Callahan says:

      Wait, Ryan, I get it! Rizzo has spent 35 years as an Austrian economist, and studied directly with people like Rothbard and Kirzner. Then he spends two years thinking about this one problem. Bob praises him for it, and as a joke, to emphasize Bob’s point, you spend 10 seconds thinking about the issue, and then post a “critique” of Rizzo.

      Sorry, I had missed the sarcasm!

      • Bob Murphy says:

        Gene, it is impossible for you to have missed sarcasm. That’s like Bing Crosby missing crooning.

        • Joseph Fetz says:

          Or, Sally Struthers missing dinner.

      • RPLong says:

        Meow. Feisty, Gene!

        Good point, I should blindly accept anything Rizzo has to say, no matter what, simply because he is deemed an expert.

        Wait, what?

        The fatal flaw of academics is the fact that they inject complexity into concepts where none previously existed. Read HA and understand it – there is no further point to add to what Mises already identified. The point: if people believe they are making the best choices, then they are acting rationally. Full stop.

        Do we need expositions on axioms of rationality and coming to conclusions about whether a set of observable behaviors is rational? Not really.

        I grant that this was part of Rizzo’s point, but the “academician’s vice” is still there. He’s making it overly complex, and so are others. Praxeology isn’t about prediction, it’s about understanding.

        But who am I to say? I’m just a nobody…

        • Bob Murphy says:

          RPLong, I have to call a foul on your part. You said, “Imagine what Rizzo’s post would have looked like if he had exposed himself to Mises’ definition of rationality from Human Action.” That makes it sound like you are saying Rizzo hasn’t read Human Action.

          Gene busts you on this–I think Rizzo actually met Mises, let alone has he read the man’s magnum opus–and then you come back, “Good point, I should blindly accept anything Rizzo has to say, no matter what, simply because he is deemed an expert.”

          No, RPLong, that’s not what Gene was saying. And I think you know that wasn’t what Gene was saying.

          • Bob Murphy says:

            And just to heighten the irony, RPLong, what Rizzo says is perfectly consistent with Mises’ own critique of transitivity as a requirement for “rationality” in Human Action.

            It would be like Rizzo saying, “I’ve been reading the work of central planners for two years, and in this post I’m going to go through and explain why I think calculation under socialism is impossible.”

            Then you say, “I would love to see Rizzo’s views if he had read some Mises. Man these academics make stuff so complicated.”

            • Bob Murphy says:

              Last thing: I’ve had two “venti” Starbucks today. So I’m much feistier than normal, RPLong. If you want, feel free to email Major Freedom about what I jerk I am…

              • RPLong says:

                It’s hard to send emails from the penalty box, but I’ll phone in an order for a couple of “Trenta” americanos next time (rather than phoning in my blog comments, wakka wakka)….

              • Joseph Fetz says:

                Hmm. I must have missed that one.

          • RPLong says:

            I don’t know. I’m not sold on what Rizzo says there, but I’ll happily concede that he has more Mises-clout than I have.

            I’ll spend my time in the penalty box for this one, but my eyes are making that squinty look that says “Hmmmmmmmm…” as I type this.

  2. Gene Callahan says:

    I bet you love Mario like a doctoral thesis adviser.

  3. David R. Henderson says:

    Thanks, Bob. Yes, he did catch me off-guard with his airline example.

    • Bob Murphy says:

      David, that’s why I don’t ask the audience anything. I just talk at the camera. And then everyone falls asleep.

      • Jonathan M.F. Catalán says:

        You undermine yourself by posting on this blog. You should stick to secluded academic journals, where only people with the right credentials can comment. The more math, the better.

  4. Matthew Murphy says:

    Since your time is so valuable, Bob, you should consider increasing the playback speed for any long videos you watch. You’ll have to download the video and use something like the VLC media player.

    I’ve explained the process here: http://www.gather.com/viewArticle.action?articleId=281474978816245

    Since you talk a bit faster than some people, I’ll probably only be able to watch your Panic of 2008 video at 2.00x. haha.

    • Bob Murphy says:

      I tried that. I’ve never heard such libertarian chipmunks before.

    • Joseph Fetz says:

      Holy crap! I thought that I was the only person that did this. However, most of the time if there is a transcript available I’ll opt for reading a speech unless there are visual aids in the speech.

      • Matthew Murphy says:

        If it’s a transcript I have my computer read it too me, usually. Nothing like a libertarian lecture while doing household chores or even playing the piano. lol.

  5. John Becker says:

    I had an economic question for Bob that I think would be great to hear about somewhere. According to this graph Krugman provided today (http://krugman.blogs.nytimes.com/2012/02/07/wages-and-values/) ; real wages have fallen since 1973. Basically right around the time we left the gold standard in my view. According to my understanding of economics, falling real wages mean a falling productivity of labor which means a lack of capital accumulation. How come people don’t talk about the consequences of a lack of savings on the economy? The way I see it, that should be the biggest story in economics today, we’ve screwed ourselves and our children with our failure to save money, yet you never hear anything about it. Is a lack of savings behind the falling standard of living, and why does no one address it?

  6. Tel says:

    I’d say surviving something around about 100 thousand years, producing several billion copies of yourself and monopolising most of the resources on a planet would be a reasonable criteria for rationality (from an economic and productivity sense at least).

    Then again, since the end goal is largely undefined, it’s a bit of a matter of opinion to say who is closer to that goal.

    • Bob Murphy says:

      Tel wrote: I’d say surviving something around about 100 thousand years, producing several billion copies of yourself and monopolising most of the resources on a planet would be a reasonable criteria for rationality (from an economic and productivity sense at least).

      I don’t know if Mario Rizzo would agree with you that insects are rational. Try emailing him. Or ask a locust to pass the question along.

  7. UnlearningEcon says:

    ‘My favorite part is where he asks the students what types of monopolies bother them, and David is expecting them to list things monopolized by the government. One kid says, “Airlines!” and David basically says, “No, that’s not what bothers you, airlines have been deregulated.” (I love David like an uncle, by the way.)’

    Can someone explain this to me? I’m feeling dense.

    • Ash says:

      David wanted people to talk about how the worst monopolies are government monopolies, like utilities and first class mail. Then the first thing anyone says is airlines, which, as anyone who knows anything about airlines in the US pre-1978 will tell you, ain’t monopolies today brother.

      Ya dig?

  8. Sam says:

    You should really put your post on reddit in the the r/economics category, you will get WAY more hits because of the increased traffic relative to the austrian subreddit. They aren’t (generally) that knowledgeable of austrianism in general, I think you will get better questions. Plus, you’ll get to eviscerate some marxists (never a bad time)….just a thought

  9. Eli says:

    What do you think of Bryan Caplan’s paper; “Why I am not an Austrian Economist”

    I read Walter Block’s response, what about Robert Murphy’s?

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