30
Jan
2014
Potpourri
==> Joe Salerno offers a rebuttal to Paul Krugman’s high-five of “Lord Keynes” post about Mises on the Great Depression.
==> Two really interesting interviews from Tom Woods: Peter Schiff (where he talks about his dad, something I haven’t heard him discuss before) and Walter Williams (who near the end explains the connection between white people and his education, in a very funny way that would get Tom fired if he said the exact same thing).
==> Mises Canada launches a new academic journal.
==> A libertarian fiction contest. (And no that term is not a pleonasm!)
at 17:21
Woods: who were your major influences? you hold views that are not consonant with Jesse Jackson. How did you not get caught in that trap?
Williams: I’m 77 years old. I was fortunate to get all my education before it became fashionable for white people to like black people. Teachers and other mentors did not give a damn about my self-esteem.
As for Peter Schiff’s father, Hans Hoppe had the best response: “He [Irwin Schiff] was a fool to believe that if he goes to American courts, the courts will find that he is right. When you have an institution that sits in judgement of itself, of course the courts will find ‘I’m right.’ Whether you are right on paper, Mr Schiff [the court says], is completely irrelevant.”
Salerno:
“I conclude with a piece of advice to Krugman in regard to his unwillingness or inability to give an honest and accurate account of the Austrian theory: Perhaps you should stop trawling obscure blogs for biased material…”
Excellent advice. Cesspools should be sidestepped, not stepped in.
Government Punishes 11-Year-Old Girl For Selling Cupcakes Without Permission”
It’s a good thing we have a monopoly on arbitration that bans voluntary arbitration between private property owners such as sellers and buyers.
If it weren’t for the monopoly banning private arbitration, 11 year old sellers of cupcakes and their willing customers would be killing and robbing with impunity.
Safe and secure in a police state. Idiots.
As I mentioned in our last discussion of Krugman, LK, and the Great Depression, government tends to consistently fall into a pattern of repressing supply. The cupcake example fits the pattern, so does shutting down lemonade stands, so does government backing of unions, so does minimum wage, so does encouragement of cartels.
All of these are repression of supply.
The ultimate consequence of persistent repression of supply, must be falling consumption, and in practical terms that means falling demand (although “demand” is sadly ill defined in this context, but “consumption” is well defined).
All of these activities are interventions. If one claims that they are engaging in empirical economic research of historical events, they need to meticulously focus IN EVERY INSTANT upon the types and degrees of intervention endured by the actors.
Such a focus purposefully disappears from Keynesian analysis.
Remember LK and “types of laissez faire”?
I agree that it is difficult to unravel the government interventions from what’s left of the free market; and in a way that’s the exact problem challenging present day market participants.
However, if broad classes of government interference end up doing essentially the same thing, this insight should make it easier to recognize the effect of that whole class of intervention and thus break down the problem into easy to handle chunks.
I wish I could +1 your commentary forever :3
“Joe Salerno offers a rebuttal to Paul Krugman’s high-five of “Lord Keynes” post about Mises “
.. which is as worthless as yours:
http://socialdemocracy21stcentury.blogspot.com/2014/01/salernos-response-to-krugman-on-mises.html
Also as unconvincing as your analysis of the problem of sticky wages:
http://socialdemocracy21stcentury.blogspot.com/2014/01/murphy-on-sticky-wages.html
Are wages sticky or do we need minimum wages to prevent them from falling (meaning non-sticky)?
Just to modify what I said, are wages sticky downward or do we need minimum wages to prevent them from falling (meaning non-sticky)? A clarification will help clarify that we are not talking of blackwhite out here.
The useful idiots are convinced by the 1% we need minimum wage. The 1% need minimum wage to prevent the wage pressure they created with their fiat inflation.
I am telling you, average wages would be HIGHER if there was no minimum wage…
lord Keynes, keeping the poor, poor…
You are truly hilarious. Here is what Salerno said (I copied it from your cesspool….oops….blog just to be sure I didn’t get you wrong)
Here is how you reacted.
Do you even read what you type out or do you just go with the flow?
Yes, that’s how I read it too. Salerno attributed those words to Krugman, and only alleged “a caricature” against LK. I think there is no doubt about this.
“Actually, our jaded scribe could not be bothered to train his sites on Mises’s actual views but rather rests content to attack a caricature of Mises’s position as presented in a pseudonymous post by an individual calling himself “Lord Keynes” on the blog Social Democracy for the 21st Century: A Post Keynesian Perspective.”
http://mises.org/daily/6651/Krugman-Claims-Mises-Couldnt-Explain-the-Great-Depression
Salerno is saying that my post was a “caricature of Mises’s position”: this is just rubbish.
LK,
You need to take a trip to the restroom to wash the egg off your face.
Face it. Salerno did not say what you said he did. You misquoted him and made a fool of yourself. I am just pointing it out.
LK, I think there is no doubt Salerno said you presented a caricature, and no doubt he attributed those words to Krugman. I did not address the charge of caricature. You certainly misread Salerno as attributing those words to yourself.
Ken B,
Your confusion stems from my statement here:
“No, Salerno, I did not say that “von Mises, faced with the reality of depression, basically dropped Austrian business cycle theory.”
Here is what I said (with my quotation from Mises following): “
Yes, I did indeed poorly word that: I did not mean to say that Salerno had mistakenly attributed those words directly to me. Of course, they were Krugman’s words
But Salerno’s post implies that I said **words to that effect.**
What I meant is that I did not say words to that effect at all.
I can still see a lot of egg on your face. Your entire post was a refutation of Salerno’s (as per your claim) statement that YOU said that Mises, faced with the reality of depression, basically dropped Austrian business cycle theory.
“Your entire post was a refutation of Salerno’s (as per your claim) statement that YOU said that Mises, faced with the reality of depression, basically dropped Austrian business cycle theory.”
And I did not say that Mises totally or completely or virtually abandoned his ABCT at all.
In short, Salerno’s implied charge against me that I did so is wrong.
Here I am suggesting that you take a trip to the restroom to wash the egg off your face and what do you do? Splatter a few more eggs liberally on your on face with this…
There was no implied charge in Salerno’s reply. Get it? No implied charge.
Krugman was the one who said you said that, LK. You should write a response to him.
lol … Rubbish. You truly have a reading comprehension problem. Krugman summarized your post that way.
I thought you were smart?
lol … Then your issue should be with Krugman, not Salerno. Will you create a blog entry on Krugman’s misinterpretation? lol…
See, Krugamn and his alter ego lord Keynes cant even keep it all straight/separated. One in the same…
So, if Salerno really thinks my post was a fair and an accurate summary of Mises’s views, he has a strange way of saying it (” our jaded scribe could not be bothered to train his sites on Mises’s actual views but rather rests content to attack a caricature of Mises’s position as presented in a pseudonymous post by an individual calling himself “Lord Keynes” )
LK, if your position is being misrepresented, the fault is Krugman, not Salerno. Salerno was just quoting what Krugman said.
Your issue isn’t with Salerno, it is with Krugman.
The same Lord Keynes that claimed RPM’s prediction of 10 % YoY CPI inflation was a prediction of hyperinflation.
I wish I were making this up. It is no wonder LK still fails to understand basic Austrian concepts if he can’t even grasp a universally accepted definition of hyperinflation.
ABCT is a theory of booms (and inevitable busts).
It is not a theory of why corrections to busts can become prolonged due to government trying to fix the problems with more inflation, and more regulations.
Keynes’ claim that even if wages and prices were perfectly flexible, capitalism would still be mired in depression, has been thoroughly debunked by George Reisman in his book Capitalism.
Aggregate demand signifies no problems are taking place in employment or output if the assumption is that prices and wages rates are perfectly flexible downward.
HI Major,
Totally off topic but if O post in the original conversation, you will never find it. Wish there was lounge.
Read Isaiah 9 and 10. Also see John 18:36 “Jesus said, “My kingdom is not of this world. If it were, my servants would fight to prevent my arrest by the Jewish leaders. But now my kingdom is from another place.”
So now put Romans 13 in proper context.
Romans 13 is a severe restriction on the power and responsibility’s of government, not a free pass. To interpret R13 as justification to turn a blind eye and give guv zero accountability just shows how the sheep have forfeited all personal authority and responsibility. Sad times. Brainwashed.
Sorry for the hijack.
No worries about the hijack.
My response:
“Severe restrictions” leading to only “modest” or “few instances of” or “just a little” anti-libertarian activity, is still anti-libertarian activity.
We can disagree over the extent to which that Romans 13 passage advocates anti-libertarian activity, but then we’d just be agreeing that it is anti-libertarian per se.
Romans 13 is anti-libertarian. I don’t know what else we can say, other than you either accept it, or deny it. It’s harsh to say that, but I don’t know what else needs to be said.
Major Freedom,
I do not think you are placing R13 in proper context therefore you are incorrectly interpreting R13. You have already stated you are not a Biblical scholar or even a Biblical hack. I think you are taking the standard statist interpretation that is resultant of brainwashing. Everywhere we go, there is a statist influence and it is difficult to get the garbage out of your brain.
Read this.
On Paul and Romans 13 and Titus 3:1
It is often claimed that Christians are required to submit to government, as this is supposedly what Paul commanded that we are supposed to do in Romans 13. Thus:
Romans 13:1-7: Let every soul be subject to the governing authorities. For there is no authority except from God, and the authorities that exist are appointed by God. Therefore whoever resists the authority resists the ordinance of God, and those who resist will bring judgment on themselves. For rulers are not a terror to good works, but to evil. Do you want to be unafraid of the authority? Do what is good, and you will have praise from the same. For he is God’s minister to you for good. But if you do evil, be afraid; for he does not bear the sword in vain; for he is God’s minister, an avenger to execute wrath on him who practices evil. Therefore you must be subject, not only because of wrath but also for conscience’ sake. For because of this you also pay taxes, for they are God’s ministers attending continually to this very thing. Render therefore to all their due: taxes to whom taxes are due, customs to whom customs, fear to whom fear, honor to whom honor.
But in actual fact Paul never does tell us in above excerpt from Romans 13 to submit to government!–at least certainly not as they have existed on Earth and are operated by men. In fact, Paul would be an outright, boldfaced hypocrite were he to command anyone to do such a thing: for Paul himself did not submit to government, and if he had then he would not even have been alive to be able to write Romans 13. For Paul himself disobeyed government, and it is a good thing that he did as we would not even know of a Paul in the Bible had he not disobeyed government. As when Paul was still only known as Saul he escaped from the city of Damascus as he knew that the governor of that city, acting under the authority of Aretas the king, was coming with a garrison to arrest him in order that he be executed. This was right after Saul’s conversion to Jesus Christ on the road to Damascus. The Jews in Damascus, hearing of Sauls conversion, plotted to kill him as a traitor to their cause in persecuting the Christians. Saul was let out of a window in the wall of Damascus under cover of night by some fellow disciples in Christ (see Acts 9:23-25). In none of Paul’s later writings does he divest himself, or disassociate himself, from these actions that he took in knowingly and purposely disobeying government: in fact, this very event is one of the things that he later cites in demonstration of his unwavering commitment to Christ (see 2 Cor. 12:22-33)!
Indeed, ever since Paul’s conversion to Jesus Christ, he spent the rest of his entire life in rebellion against mortal governments, and would at last–just as with Jesus before him–be executed by government, in this case by having his head chopped off. Paul was continuously in and out of prisons throughout his entire ministry for preaching the gospel of Christ; he was lashed with stripes 39 times by the “authorities” for preaching Christ; he was beaten with rods by the “authorities” for preaching Christ; and none of these rebellions of his did he ever disavow: indeed he cited them all as evidence of his commitment to Jesus (again, see 2 Cor. 12:22-33)!
But even more importantly, if Paul is saying in Romans 13 what many people have said he meant, i.e., that people should obey mortal, Earthly governments, then it is questionable whether Paul could even be a genuine Christian. For as was pointed out above, Jesus would not even have existed as we know of today had it not been for Joseph and Mary intentionally disobeying king Herod the Great and escaping from his reach when they knew that Herod desired to destroy baby Jesus (see Matt. 2:13,14). Thus, if indeed Paul meant in Romans 13 that we are to obey Earthly governments then this would mean that Paul would rather have Joseph and Mary obey king Herod the Great and turn baby Jesus over to be killed.
So what in the world is going on here with Paul and Romans 13? Is Paul a hypocrite? Is Paul being contradictory? Actually, No to both. Once again, as with Jesus’s answer to the question on taxes, this is another ingenious case of rhetorical misdirection. Paul was counting on the fact that most people who would be hostile to the Christian church–the Roman “authorities” in particular–would, upon reading Romans 13, naturally interpret it from the point of view of legal positivism: i.e., that such people would take for granted that the “governing authorities” and “rulers” spoken of must refer to the men who operate the governments on Earth. But never does Paul anywhere say that this is so! (Legal positivism is the doctrine that whichever gang is best able to overpower others with arms and might and thereby subjugate the populace and who then proceed to proclaim themselves the “authority” are on that account the rightful “Authority.”)
But before proceeding with the above analysis, what would the motive be for Paul to include such rhetorical misdirection in his letter to the people at the church of Rome? In answering this, it must be remembered that just as with Jesus, Paul was not free to say just anything that he wanted. The early Christians were a persecuted minority under the close surveillance of the Roman government as a possible threat to its power. Here is Biblical proof of this assertion written by Paul himself:
Galatians 2:4,5: And this occurred because of false brethren secretly brought in (who came in by stealth to spy out our liberty which we have in Christ Jesus, that they might bring us into bondage), to whom we did not yield submission even for an hour, that the truth of the gospel might continue with you.
Paul never intended that his letter to the Roman church be kept secret, and he knew that it would be copied and distributed amongst the populace, and thus inevitably it would fall into the hands of the Roman government, especially considering that this letter was going directly into the belly of the beast itself: the city of Rome. Thus by including this in the letter to the church at Rome he would help put at ease the fears of the Roman government so that the persecution of the Christians would not be as severe and so that the more important task of the Church, that of saving people’s souls, could more easily continue unimpeded. But Paul wrote it in such a way that a truly knowledgeable Christian at the time would have no doubt as to what was actually meant.
The Church leaders at the time would have known that Paul obviously couldn’t have meant the people who control the mortal governments as they exist on Earth when he referred to the “governing authorities” and “rulers” in Romans 13, for that would have made Paul a shameless hypocrite and also meant that he would desire that baby Jesus had been killed (for surely the histories of Paul and Jesus’s lives would have been fresh on their minds). The only answer that can make any sense of this seeming riddle is that one doesn’t actually become a true “governing authority” or “ruler” simply because one has managed by way of deception, terror, murder and might to subjugate a certain population and then proceed to thereby proclaim oneself the “King” or the “Authority” or the “Ruler.” Instead, what Paul is saying is that the only true and real authorities are only those that God appoints, i.e., one cannot become a real authority or ruler in the eyes of God simply because through force of arms one has managed to subjugate a population and then proclaim oneself the potentate. Thus, by saying this Paul was actually rebuking the supposed authority of the mortal governments as they exist on Earth and are operated by men!
“Let every soul be subject to the governing authorities. For there is no authority except from God, and the authorities that exist are appointed by God.” (Rom. 13:1.) leaves wide open the possibility that those who control the mortal governments on Earth are not true authorities as appointed by God. The fallacy most people make when encountering a statement such as this is to unthinkingly and automatically assume that Paul must be referring to the people in control of the mortal governments that exist on Earth–for after all, don’t these people who run these Earthly governments call themselves the “governing authorities”? Do they not teach their subjects from birth that they are the “rulers” and the “authorities”? But when we factor in the life history of both Jesus and Paul, then it can leave no room for doubt: Paul most certainly could not have been referring in Romans 13 to the people who control the mortal governments as they exist on Earth–otherwise Paul would be an outright hypocrite as well as an advocate of deicide against baby Jesus. Indeed, God Himself directly confirms this very thing:
Hosea 8:4: “They set up kings, but not by Me; They made princes, but I did not acknowledge them.”
But, some may inquire, what about Paul telling us to pay taxes in Romans 13:6-7? Thus:
Romans 13:6,7: For because of this you also pay taxes, for they are God’s ministers attending continually to this very thing. Render therefore to all their due: taxes to whom taxes are due, customs to whom customs, fear to whom fear, honor to whom honor.
But does Paul really tell us to pay taxes here? Again, just as with Jesus, nowhere does Paul actually tell anyone to pay any taxes! Paul continues with the rhetorical misdirection that he started in the beginning of Romans 13, knowing–just as Jesus knew before him–that those who would be hostile to the Christian church would automatically assume what they are predisposed to assume: i.e., that the taxes and customs “due” are due to those in control of the governments who levy them. But here Paul was being wise as a serpent and harmless as a dove, as Paul never said any such thing. For when Paul says “Render therefore to all their due: taxes to whom taxes are due, customs to whom customs” this just begs the question: to whom are taxes and customs due? The answer to which could quite possibly be “No one.” And this is precisely how Paul proceeds to answer his own question-begging statement, in Romans 13:8-10:
Owe no one anything except to love one another, for he who loves another has fulfilled the law. For the commandments, “You shall not commit adultery,” “You shall not murder,” “You shall not steal,” “You shall not bear false witness,” “You shall not covet,” and if there is any other commandment, are all summed up in this saying, namely, “You shall love your neighbor as yourself.” Love does no harm to a neighbor; therefore love is the fulfillment of the law.
So there we have it in no uncertain terms: Owe no one anything except to love one another! Yet since when have taxes ever had the slightest thing to do with love? As was explained above, all mortal governments throughout history steal and extort wealth from their subjects which they call “taxes,” yet at the same time governments make it illegal for their subjects to steal from each other or from the government. Thus in taxes we see that historically all governments do to their subjects what they outlaw their subjects to do to them. Thus, all Earthly, mortal governments, by levying taxes, break the Golden Rule which Jesus commanded everyone as the supreme law.
In the earlier discussion on Jesus and taxes we learned that when Jesus said “Give on to Caesar that which is Caesar’s and give unto the Lord that which is the Lord’s” he was, in effect, actually saying that one need not give anything to Caesar: as nothing is rightly his, considering that everything that Caesar has has been taken by theft and extortion.
And what of Paul writing in Titus 3:1: “Remind them to be subject to rulers and authorities, to obey, to be ready for every good work”? As was clearly demonstrated above, Paul was referring to the true higher authorities as recognized by God, not to the diabolical, Satanic, mortal governments as they have existed on Earth–as Paul spent his entire ministry in rebellion against the Earth-bound, mortal “authorities,” and was at last put to death by them. (For other cases of righteous disobedience to government in the Bible, see Exo. 1:15-2:3; 1 Sam. 19:10-18; Esther 4:16; Dan. 3:12-18; 6:10; Matt. 2:12-13; Acts 5:29; 9:25; 17:6-8; 2 Cor. 11:32,33.)
And as further proof of this, consider Paul’s advice to Christians as regarding being judged by what the government considers the “authority”:
1 Corinthians 6:1-8: Dare any of you, having a matter against another, go to law before the unrighteous, and not before the saints? Do you not know that the saints will judge the world? And if the world will be judged by you, are you unworthy to judge the smallest matters? Do you not know that we shall judge angels? How much more, things that pertain to this life? If then you have judgments concerning things pertaining to this life, do you appoint those who are least esteemed by the church to judge? I say this to your shame. Is it so, that there is not a wise man among you, not even one, who will be able to judge between his brethren? But brother goes to law against brother, and that before unbelievers! Now therefore, it is already an utter failure for you that you go to law against one another. Why do you not rather accept wrong? Why do you not rather let yourselves be cheated? No, you yourselves do wrong and cheat, and you do these things to your brethren!
Paul said that the government judges “are least esteemed by the church to judge”! It is clear that he considered them to be no authority at all!
But moreover, even Jesus didn’t consider the Earthly, mortal “rulers” to be true rulers and authorities! Thus:
Mark 10:42-45: But Jesus called them to Himself and said to them, “You know that those who are considered rulers over the Gentiles lord it over them, and their great ones exercise authority over them. Yet it shall not be so among you; but whoever desires to become great among you shall be your servant. And whoever of you desires to be first shall be slave of all. For even the Son of Man did not come to be served, but to serve, and to give His life a ransom for many.”
By saying this Jesus was in fact rebuking the supposed “authority” of the Earthly “rulers”! Just because mortals on Earth may consider someone to be an “authority” and “ruler” does not mean that God considers them to be so!
http://anti-state.com/redford/redford4.html
Gamble, you are assuming there is only one author, or at least only one group of people with the same beliefs regarding history, when it comes to what Paul said.
You are trying to argue that my interpretation of Romans 13 can’t be right, because if it were right for the sake of argument, then it would imply that statements attributed to Paul would be inconsistent. But that is what I am claiming is the case for not only Paul, but the Bible as such.
The assumption that every word attributed to Paul to be Paul’s actual words, is unjustified.
Your latest attempt to interpret Romans 13 as referring to governments of heaven rather than governments of Earth, is both ridiculous and insulting of my intelligence.
What is also insulting is your accusation that my interpretation of Romans 13 is not based on my reason, but rather “statist brainwashing”. It is also ironic, because it is precisely individuals calling themselves statesmen who have used Romans 13, and quite likely wrote Romans 13, to justify their statist aggression.
Gamble, sorry but you’re letting faith cloud your reason.
Hi Major,
Christians should believe ALL scripture is inspired by God regardless of who penned it. ”
2 Timothy 3:16
16 All Scripture is God-breathed and is useful for teaching, rebuking, correcting and training in righteousness,”
So we do not try to exclude passages, rather place each part in proper context fully realizing Gods sovereignty.
I can not help that people use the Bible words for evil. This has been, is and always will be. People use all kinds of excuses for aggression, the Bible is 1 of these excuses as is the United States Constitution. Infinite number of excuses to violate the non aggression principle.
I am telling you, you need to place R13 in the full context of the entire Bible. There are no stand alone passages. Prove scripture with scripture.
I guarantee you have yet to read the above article from James Redford regarding R13, taken from James Redford’s larger work, Jesus Was An Anarchist.
How can we discuss when you refuse to /read/learn and have already made your mind. You are afraid if R13 is not anti libertarian, you will then rethink other false beliefs you have about Christ and God…
Hi Major,
God wrote the Bible, who penned it is not important.. There are no contradictions. You need to check your premises.
2 Timothy 3:16
16 All Scripture is God-breathed and is useful for teaching, rebuking, correcting and training in righteousness,
I can not control how people use and apply the Bible. Of course evil men will use the Bible for evil. There are infinite excuses to violate the non aggression principle.
Regarding R13, it is not a free pass for government to do anything it wants. R13 does just the opposite. R13 severely restricts governments role to punishing evil and commending good works. If this is not the non aggression principle, then I don’t know what is…
Hi Major, I repeated your above, below is my response.
Gamble, you are assuming there is only one author, or at least only one group of people with the same beliefs regarding history, when it comes to what Paul said.
MF, The Bible was written by God. 2 Tim 3:16 All Scripture is God-breathed and is useful for teaching, rebuking, correcting and training in righteousness.
Gamble You are trying to argue that my interpretation of Romans 13 can’t be right, because if it were right for the sake of argument, then it would imply that statements attributed to Paul would be inconsistent. But that is what I am claiming is the case for not only Paul, but the Bible as such.
MF, It is not that Paul is inconsistent, your interpretation is not in full context therefore inconsistent.
The assumption that every word attributed to Paul to be Paul’s actual words, is unjustified.
MF, see above 2Timothy3:16
Gamble Your latest attempt to interpret Romans 13 as referring to governments of heaven rather than governments of Earth, is both ridiculous and insulting of my intelligence.
MF, No, governments submit to the highest authority, God, otherwise they are not government and have no authority. Additionally, in America, all governments submit to the next highest authority, a paper constitution. More context: John 18:36 Jesus said, “My kingdom is not of this world. If it were, my servants would fight to prevent my arrest by the Jewish leaders. But now my kingdom is from another place.”
Gamble What is also insulting is your accusation that my interpretation of Romans 13 is not based on my reason, but rather “statist brainwashing”. It is also ironic, because it is precisely individuals calling themselves statesmen who have used Romans 13, and quite likely wrote Romans 13, to justify their statist aggression.
MF, Sorry you feel insulted. I think there are several reasons you refuse to alter, even in the smallest increment, your existing interpretation of R13. Some of it is the constant socialist bombardment we endure and some of it is you are afraid of the implications that proper attribution of the non-aggression principal to R13 and other passages such as Matt 7:12 Matthew 7:12“So in everything, do to others what you would have them do to you, for this sums up the Law and the Prophets.”, the golden rule, may have. Proper attribution could cause your mind to change or worse, your entire belief system to crumble. Regarding statesman using Bible to justify aggression, when have statesman not used any and every possible source to justify aggression? Look at what they have done to Constitution. There are no limits to libido dominandi.
Gamble, sorry but you’re letting faith cloud your reason.
MF, I had much reason prior to any faith. I use to be the number 1 Bible/God/Jesus/Holy Spirit, skeptic…
The concepts of intervention vs. non-intervention do not appear in any of LK’s writing and thus he cannot and will not discern the difference between a voluntary and non-voluntary transaction. Therefore, he cannot understand the difference between economic calculation and mis-calculation. Therefore, he cannot begin to understand the ABCT and/or other variations and types of mis-calculations and problems resulting therefrom.
I know I’m beating a dead horse here, but nothing ever changes with him or any other of our opponents. They are obviously so threatened by a fair and honest description of the NAP and economic calculation that they must obfuscate, distort and defame right from the get-go. They are clearly scared to death.
Re Salerno. Screed much?
” the honor associated with being recognized as a leading intellectual threat to establishment economics and the American Welfare-Warfare State”
Wertfrei? Pull the other one.
And in a post complaining about caricature!
For starters, let’s examine how LK either does not understand the difference between intervention and non-intervention or else is intentionally trying to obfuscate these easily understood differences:
How suppression of trade unions was to be achieved and their freedom of association restricted was left understated, and Mises’s feeble hope that the “formation of wage rates should be hampered neither by the clubs of striking pickets nor by government’s apparatus of force” (Mises 2006 [1931]: 169) rings hollow.
How else could such suppression of trade unions be realistically achieved except by government coercion?
Mises hints at the solution in a passage where unions are themselves blamed as perpetrators of all sorts of evil:
“If the government were to proceed against those who molest persons willing to work and those who destroy machines and industrial equipment in enterprises that want to hire strikebreakers, as it normally does against the other perpetrators of violence, the situation would be very different. However, the characteristic feature of modern governments is that they have capitulated to the labor unions.” (Mises 2006 [1931]: 167).
This is the point in the essay where Mises may as well have been winking at his audience to indicate what his words imply: that governments should break up and repress unions and restore labour market freedom.
It comes as no surprise that Mises had praised Mussolini’s fascism in 1927 because it had (according to Mises) “saved European civilization.” Mises also contended that the “merit that Fascism … [had] thereby won for itself will live on eternally in history.” Part of the reason for this sickening praise was no doubt that Italian fascism had smashed independent trade unions. And, if that wasn’t enough, Mises was himself in the 1930s to become an economic adviser to the Austro-fascist Engelbert Dollfuss (Chancellor of Austria from 1932), who did indeed smash independent trade unions in Austria.
The reason is that capitalist investment and demand for labour is not a simple function of the wage rate or interest rate, as naïve, ignorant and incompetent Austrian ideologues like Mises thought, and many still think.
The propensity to invest is a complex phenomenon involving many factors, not just interest rates and the wage rate, but fundamentally the level of demand for output, the degree of uncertainty of capitalists about the future, the expectations of business people, the general state of expectations, and the state of the financial system and credit markets, and so on. Above all, the first three factors – demand for output, uncertainty and expectations – must be considered fundamental causes of the inducement to invest for many businesses, especially those that are mark-up price enterprises with excess capacity and inventories.
In the Great Depression, business expectations were shattered in an unprecedented way, as was demand for output. Simply reducing wages was no reliable or effective cure for unemployment in the 1930s (or indeed during recessions in general) when business expectations were deeply pessimistic, demand was stagnant and uncertainty about the future deep. If we also add to this the fact that many nations had banking crises and lending practices would have become deeply conservative, Mises’s focus on wages as the main cause of 1930s unemployment can be seen as the folly it was.
So you do not advocate any violence against free associations of trade unions (assuming they do not aggress against employers), but you hope for labour market flexibility in the way Mises did.
Pray tell us how this miracle is to be achieved.
Magic perhaps?
Sound money stores value. Save, give yourself leverage. Create labor shortage. Wala.
Fiat, all bets are off.
You’ve already admitted as much by rejecting the thesis that prices do not change, or can’t change, or are forever rigid.
By admitting that prices can change, you are conceding the point, because prices are changing in accordance with Austrian theory about subjective value, knowledge, and preferences.
The unions attack picket line crossers.
What the heck are we talking about?
Oh come on now. Understanding intervention vs non-intervention and/or the NAP is beyond LK’s pay grade.
Roddis I was zapping comments from the “other side” for calling Austrians idiots (or comparable terms) so please don’t insult people, thanks.
How can I say that LK is avoiding analyzing a topic in a way that isn’t an “insult”? I thought I was trying to be somewhat lighthearted about it.
Very easily, since a union is just another type of corporation, it should be treated as exactly like a corporation. No special laws that apply only to unions, no special treatment allowing protection from liability, no taxpayer funded bailouts of union-dominated industries (like what happened with GM) and absolutely no ability for unions to prevent non-unionists from going about their regular business.
Miracle achieved!
As I’ve explained to LK in detail numerous times before, his reference to Mises and fascism is completely out of context and [surprise!!!] defamatory. Mises was clearly (and merely) pointing out that (in his opinion in 1927) the pre-Hitler form of fascism had halted the spread of Stalinist North Korean-like mass murdering Communism in Italy (Mussolini was indeed quite popular with hip leftists and even FDR until he joined up with Hitler in the late 1930s). But Mises also makes clear that fascism is a brutal and ignorant movement because fascists cannot even argue or engage in debate (just like socialists) and that fascism will lead to a civilization-ending war:
“Fascism can triumph today because universal indignation at the infamies committed by the socialists and communists has obtained for it the sympathies of wide circles. But when the fresh impression of the crimes of the Bolsheviks has paled, the socialist program will once again exercise its power of attraction on the masses. For Fascism does nothing to combat it except to suppress socialist ideas and to persecute the people who spread them. If it wanted really to combat socialism, it would have to oppose it with ideas. There is, however, only one idea that can be effectively opposed to socialism, viz., that of liberalism. ****
So much for the domestic policy of Fascism. That its foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no further discussion. To maintain and further raise our present level of economic development, peace among nations must be assured. But they cannot live together in peace if the basic tenet of the ideology by which they are governed is the belief that one’s own nation can secure its place in the community of nations by force alone.
It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error.” Pages 50-51
See Ralph Raico:
http://mises.org/journals/jls/12_1/12_1_1.pdf
No one denies the nature of entrepreneurship and uncertainty in a market economy. Since LK still does not understand economic calculation, he make silly, baseless and distorted claims like this, stripped of all context:
The reason is that capitalist investment and demand for labour is not a simple function of the wage rate or interest rate, as naïve, ignorant and incompetent Austrian ideologues like Mises thought, and many still think.
As Jesus Huerta de Soto has written, there is really no great divide between Hayek’s view of prices as a source of knowledge and Mises’ view of economic calculation as part of entrepreneurship.
Therefore, Salerno’s dichotomy is patently absurd (“Ludwig von Mises as Social Rationalist,” 45 and 55). Salerno claims that Mises saw the problem of socialism as one of economic calculation and not of dispersed knowledge, when the two are indissolubly linked. Mises himself, as we have seen from the beginning, not only emphasized the importance of the “characteristic role” of the entrepreneur in terms of providing him with information, but Mises also invariably conceived economics as a science which concerns not things but information or knowledge, understood as spiritual realities. (“Economics is not about things and tangible objects, it is about men, their meanings and actions,” Human Action, 92.) Page 125, footnote 27 “SOCIALISM, ECONOMIC CALCULATION AND ENTREPRENEURSHIP” by Jesús Huerta de Soto”
Thus, it makes no sense to assert, as Salerno did, that Mises considered the problem of economic calculation a mere problem of Robbinsian maximization in which the ends and means are given. (Joseph T. Salerno, “Ludwig von Mises as Social Rationalist,” 46.) From a dynamic standpoint, neither the ends nor the means are given, but instead they must be constantly created and discovered. Calculation involves looking to the future and hence, creating new information. Footnote 30, page 127
David Ramsay Steele’s book, From Marx to Mises: Post-Capitalist Society and the Challenge of Economic Calculation (La Salle, Illinois: Open Court Publishing, 1992), deserves mention, at least for the breadth of its approach. It may also be helpful to review the debate which Professors Joseph Salerno, Jörg Guido Hülsmann, Hans-Hermann Hoppe, and Leland Yeager engaged in between 1992 and 1995 in the Review of Austrian Economics. Their point of contention was the supposed differences in approach between Mises’s and Hayek’s criticisms of socialism, differences which, for reasons offered in footnotes 16 and 30 of chap. 4, I concur with Leland Yeager in viewing as more fictional than true. Footnote 1, page i
http://www.jesushuertadesoto.com/books_english/socialism/socialism.pdf
LK writes:
Even though many nations saw price deflation in the Great Depression, even in the 1930s mark-up prices were significant and relatively inflexible as compared with other markets: Gardiner Means, for example, discovered that the administered pricing sector of the US economy had seen price declines of only about 10% during the depression, whereas the more competitive or flexprice sectors had seen price falls of about 40 to 60% (Means 1975) – a very clear disparity.
Finally, there is not a shred of evidence that Mises ever understood that even if wages and price were highly flexible, the existence of fixed nominal debt impedes and thwarts his imagined type of market clearing dynamics. For if debts remain fixed and wages and prices fall (or even more disastrously if wages fall but prices are less flexible), then it is likely that debtors will face severe problems as their burden of debt soars, and most probably deflation will induce bankruptcy of debtors and then bankruptcy of creditors and banks.
http://socialdemocracy21stcentury.blogspot.com/2014/01/misess-explanation-of-great-depression.html
There is not a shred of a reference here to the argument that to the extent prices were out of whack, it was the result of prices having been artificially bid up in an unsustainable manner by funny money emissions generally induced by interest rates that would not obtain but for INTERVENTION, the concept that must be suppressed and ignored. The purpose of the concept of “the natural rate or rates of interest” is nothing more than a teaching tool to help describe what those rates (aka “prices”) MIGHT have been or might be in the absence of such intervention (the concept that must be suppressed and ignored).
“There is not a shred of a reference here to the argument that to the extent prices were out of whack, it was the result of prices having been artificially bid up in an unsustainable manner by funny money emissions”
Because I do not accept your absurd Rothbardian nonsense that fractional reserve banking is immoral, fraudulent or economically unjustifiable.
The absurd reference to “funny money” only begs the question by assuming that it was illegitimate in the first place, when your opponents DO NOT ACCEPT THAT.
And how can mark-up prices which are not generally response to demand changes have bid up in the first place?
a) Morality need have nothing to do with it. Prices are artificially bid up creating false prices with newly created money indistinguishable from money actually earned and saved pursuant to a interventionist regime granting banks special privileges. Intervention and false prices disappear from your distorted analysis.
b) And how can mark-up prices which are not generally response to demand changes have bid up in the first place?
How can increased REALIZED “mark-up prices” not be in response to “demand changes”. How can any REALIZED price not be in response to “demand changes”.
(1) you notice I also said ” economically unjustifiable” too.
The whole notion of false prices presupposes that you think all money must be commodity money or based on it and previously saved.
That is rubbish.
“False prices” just begs the question of why they would be false prices. You say they are false prices because you think that new money creation is either (1) immoral or (2) economically unjustifiable It is neither.
(b) is gibberish idiocy
Guys, let’s keep it civil please. LK if someone called you a name, let me know and I’ll wag my finger at him too, I’m just happening to see you saying “idiocy” here. Let’s chill out kids, thanks.
What about Rothbardians telling people to, paraphrasing, copulate elsewhere?
Who said I was a Rothbardian?
http://amorysabor.com/wp-content/uploads/2012/11/babu-finger-wag1-1.gif
LK,
Are you adopting “Debt Deflation”?
LK,
Who enforces nominal debts?
Or, as an aside, in the case of people like me, who doesn’t really enforce nominal debt contracts, but that’s a different story…
LK,
What is the difference between the Post Keynesian conception of an aggregate demand shortfall and, say, the market monetarists conception of the NGDP shortfall due to tight money?
Does the entity who both controls the value of nominal debts and money as well as enforce contractions denominated in that currency have any implications for sticky prices?
What do you think of this:
http://www.debtdeflation.com/blogs/2013/12/17/oh-my-paul-krugman-edition/
“Debt was rising by around 2 per cent of GDP annually; that’s not going to happen in future, which a naïve calculation suggests means a reduction in demand, other things equal, of around 2 percent of GDP.”
Could that point be construed as sounding a little bit like something Mises might get behind? It was of course written by Paul Krugman.
“contractions” should have been “contracts” but it turns out it’s a quite appropriate autocorrect malapropism.
Not only that, but LK insists that debt deflation is not covered in Austrian analysis. That mountain of funny money debt used to buy all those malinvested assets is ALWAYS PAID OFF IN FULL without any missed payments in every Austrian analysis, right?
Debt deflation is certainly compatible with Austrian theory. However, I think it’s fair to say that individual Austrian economists have not given sufficient emphasis to the way QE money printing and debt deflation can to some extent counterbalance each other, and thus the resulting overall price inflation is smaller than it would be otherwise.
The other thing that many people miss is that debt deflation causes a Cantillon effect because those “missed payments” you mention are not evenly distributed… they happen more in some sectors than others. When you have debt deflation and simultaneously QE money printing they may counterbalance in aggregate, but the Cantillon effect is doubled, so in effect you get a big wealth transfer as a result, which we are seeing. Some people may regard this as unfair, and who knows? Maybe it is unfair.
Replies seem to be redirected to the bottom of the page.
This seems to happen whenever I give people like Sunstein what they deserve on blogs that don’t deserve to house that kind of venom.
But just as a rule of thumb, if you are a Cass Sunstein and you imply your opponents have a personality disorder simply because they think illegal spying on Americans is a priori wrong because it is illegal, then don’t be shocked if the side you are contemptuous of gets a little salty in their language.
Again, it’s Bob’s blog. So, sorry.
I agree with your previous comment. Austrians should adopt everything that is congruous with their core views.
If we are fighting for our various ideologies, I would not cede debt deflation or money illusion to the Keynesians.
The core of Austrianism seems to me should be that marginal interventions can distort or delude the market. – I could be wrong and love to be factually corrected.
The core of Keynesianism should be that markets can create their own delusions endogenously. – again, I could be wrong.
I happen to be fine accepting both of those at the same time. I also don’t go the next step along with Keynesians that market self-delusion necessitates marginal government interventions even with the best of intentions.
In short, the key to mainstreaming is to be an expansive rather than reductive and resilient rather than fragility.
Learn from Paul Krugman. He adopts Debt Deflation at the drop of a hat and if I’m right he is actually reading up on Austrian theory so that he can assimilate the parts he likes.
He also avoids setting up the fragility of clearly falsifiable claims.
If Austrians just learn some differential equations they are in like Flynn, IMHO.
Considering many of them have degrees in mathematics, I don’t think it’s a matter of ‘learning’ anything.
I hope so. Me being wrong in my impressions and exaggerations is always a possibility. Math application is typically how people are arbitrarily weeded out of the high echelons of academic debate.
Andrew, that weeding out isn’t a guarantor of quality. Maths requires effort to be learnt, and a certain level of intelligence (differentiation and statistical techniques like regression analysis are not difficult once learnt in the grand scheme of things). It does not, however, imply that those who are conversant in it possess a superior intellect to those who are not. I think what it does do is put off those who do not understand the maths and functions as a means of rendering econ more esoteric than it needs to be.
It may impress academics but for the most part, what does the maths add that verbal explanations do not?
Exactitude, verifiability, and quantifiable arguments. All astronomers use math, no astrologer does.
What are you talking about? Of course astrologers can use math in their work.
You mean like this? http://m.wikihow.com/Believe-in-Astrology-Using-Math
I mean to frame their arguments and make exact predictions. The question was, what does math bring That verbal arguments lack. Precise prediction is the last thing you’ll find an astrologer wanting to do.
Andrew’ wrote: “The core of Keynesianism should be that markets can create their own delusions endogenously. – again, I could be wrong.”
Keynes and his clones certainly create their own delusions endogenously.
“False prices” just begs the question of why they would be false prices.
It’s those same false prices which are the basis of your Minsky-ite theory:
The financial instability hypothesis has both empirical and theoretical aspects. The readily observed empirical aspect is that, from time to time, capitalist economies exhibit inflations and debt deflations which seem to have the potential to spin out of control. In such processes the economic system’s reactions to a movement of the economy amplify the movement–inflation feeds upon inflation and debt-deflation feeds upon debt-deflation. Government interventions aimed to contain the deterioration seem to have been inept in some of the historical crises. These historical episodes are evidence supporting the view that the economy does not always conform to the classic precepts of Smith and Walras: they implied that the economy can best be understood by assuming that it is constantly an equilibrium seeking and sustaining system.
http://www.levyinstitute.org/pubs/wp74.pdf
you clearly have very little understanding of the subjects your attempt to talk about, Bob.
Because he wants government violence out of his and other people’s lives, obviously.
Anyone can quibble with anyone else, but ideology makes the choice pretty selective.
Then by all means, feel free to demonstrate this.
To the extent there is anecdotal evidence of “fixprices” by large established firms, I would think such would be expected during their periods of prosperity. Absent from the analysis are the great majority of new firms that go bust (and sell off their stuff at “market clearing prices”). Also absent from the analysis is the information generated for the benefit of possible competitors (“I can make that cheaper and better”). When the established firm goes bust (the auto industry) thanks in part to new competition, that part of the story disappears from the “fixprice” analysis.
We have to realize that this “fixprice” nonsense is THE ENTIRE CASE against Austrian analysis. The debate is over. We’ve won.
” anecdotal evidence of “fixprices” by large established firms”
lol… You mean properly well sampled direct surveys of firms from ALL developed nations in most sectors and multiple firm sizes — sometimes involving 1000s of firms, and all of them reporting that mark-up pricing accounts for about 54-70% pf prices in modern market economies?
http://socialdemocracy21stcentury.blogspot.com/2014/01/murphy-on-sticky-wages.html
Appendix 2
I think you suffer from severe illiteracy:
“anecdote
a A narrative of an amusing or striking incident (orig. an item of gossip). E18. b Art. (The portrayal of) a small narrative incident; a painting portraying a small narrative incident
anecdotal a. of, pertaining to, or consisting of anecdotes”.
——–
The evidence isn’t “anecdotal”, roddis.
What firm owners say they would do in response to X, is not necessarily what happens when X occurs.
Saying and doing are not identical.
What you are claiming is “evidence” is not evidence of the market process, but evidence of what people believe, rightly or wrongly.
They are not saying what they would do in the future in some vague or tenuous way, but what they have done in the past and at the time they were interviewed and what their company policy is for the future.
We’re expected to believe that this has zero relevance to what they will do in the future, according to Major_Idiot.
“What you are claiming is “evidence” is not evidence of the market process, but evidence of what people believe, rightly or wrongly.”
lol.. So what business people report as what they normally do is not “not evidence of the market process”.
That’s pretty priceless.
I think it’s your lack of class as much as it is you’re biased world view why very few people take you seriously.
They aren’t economic statistics because they aren’t measuring any economic actions that ACTUALLY HAPPEN. The reason you will not dive into the statistics is because it will contradict your theories.
No LK it is not. In the past herbalists gave people useful decoctions with medical effect but explained it in terms of essences, chi, humors, demons. Yet in no case were essences, chi, humors or demons involved. You must argue from actual transactions.
Is this a joke, Ken B?
Setting prices based on cost is not an unprovable supernatural phenomenon interpreting some other natural event.
No. Surveys do not suffice. You must present evidence of the actual prices.
I am not denying price rigidity, for which you may well have evidence. I am denying the evidential adequacy of surveys of intent or belief.
Ask Roddis how often he has refuted you. Survey the readers here. You need a clearer counter example??
A survey of “belief” implies mere matters of opinion or interpretation about which there are no properly established facts.
But it is a matter of fact that firms sell products and that managers or pricing administrators of firms make those decisions and have this knowledge.
To reduce a direct well sampled survey of how a firm sets prices to taking a poll of highly subjective interpretations of who won in a debate on Free Advice is completely unconvincing, Ken B.
1. Hank’s analysis is excellent.
2. Cosmic evidence of the precise motivation and thought process of economic actors “setting” prices (aka “making offers”) does not in any way refute Austrian analysis.
“A survey of “belief” implies mere matters of opinion or interpretation about which there are no properly established facts.
But it is a matter of fact that firms sell products and that managers or pricing administrators of firms make those decisions and have this knowledge.
To reduce a direct well sampled survey of how a firm sets prices to taking a poll of highly subjective interpretations of who won in a debate on Free Advice is completely unconvincing, Ken B.”
Much like your entire argument.
You are still simply asking people what they “think” they do, and if these people “think” they actually ignore demand, whether they use cost-plus pricing or not, maybe their bosses should consider firing them.
Again, you’ve provided a) no tangible evidence of the prevalence of “cost plus” pricing” and b) that this pricing is insensitive to demand, which narrows the ranges in which it may take place.
So kindly, offer this evidence or begone to your little blog.
Again, what people say in a survey, is not the same as what they do.
Take a look at a history of the producer price index for example. The changes you see generate changes in business costs, and when combined with cost plus profit pricing, is evidence that contradicts what people say in surveys.
Also, you are contradicting yourself. You are claiming that minimum wage laws are required to prevent wage rates from falling, and that wages are sticky downward.
Yes, what people say in surveys is not the same as what prices actually take place. If what people said in a survey on prices were accurate, then we would not see changes in the PPI for example.
lK,
I followed your link . I read your entire post about Murphy and sticky wages. I rad some other things while I was there. I also followed some of your links.
1. Bob murphy is not Ludwig von Mises, although I agree dead people not as fun to argue with. Bob is 2 years younger than me and by no means does Bob have what Mises said down pat. Sorry Bob. Maybe you should try to rebut Mises directly more often?
2. You link to this http://bilbo.economicoutlook.net/blog/?p=661
and present this as the authoritative definition/explanation of quantitative easing. The author says that QE is not printing money, rather is a zero sum gain because the central bank is simply purchasing assets and balance sheets cancel out. Author also says this process does not lead to increased liquidity or inflation. Author also questions the actual benefit of such a process and basically claims it does work because banks create reserves by giving loans, loans are created by credit worthy demanders.
So I have a few questions.
Why does the Central bank even do this?
Does central bank perceive “assets” as junk, in exchange for something of value?
If “assets” were junk, then the how do the balance sheets truly balance, other than on paper? If “assets” were not junk, then why QE? Is central bank wasting oxygen?
How do we know banks would not have loaned even less than they are now, if their balance sheets contained said “assets” rather than new central bank cash?
How can we be sure QE has not encouraged banks to lend more, to non credit worthy demanders, ultimately creating inflation not in the form of stationary reserves, rather , in the form of new loans?
Gamble wrote:
Bob is 2 years younger than me and by no means does Bob have what Mises said down pat. Sorry Bob.
I’m curious what prompted this. I won’t even yell “Rubbish” if you tell me.
I on the other hand give Gamble enough credit to assume he knows his own age.
I’m a Young Earth Birther.
Maybe that’s the link. I cannot see what understanding Mises has to with your relative ages.
LKeynes is the self appointed expert of all things Keynes and all things anti Mises. He quotes Keynes on a regular basis and claims to argue Keynes exact point of view against Mises exact point of view.
I was simply encouraging lK to argue something directly from Mises rather than through you. Not that you guys are not entertaining.
Here is a Mises quote. Food for thought.
“Capitalism and socialism are two distinct patterns of social organization. Private control of the means of production and public control are contradictory notions and not merely contrary notions. There is no such thing as a mixed economy, a system that would stand midway between capitalism and socialism.”
I was simply encouraging lK to argue something directly from Mises rather than through you.
When you said “By no means does Bob have what Mises said down pat. Sorry Bob” it sure sounded like you thought I had somehow misrepresented Mises. So if you think that, I’m curious to know what it was.
The link lK provided to the sticky wages argument at his website, I read it. IT sounded like lK got the upper hand. Now since I wrote all of this, I went back and read more lK and realized he plays it fast and lose with the facts. So he does have an uncanny knack of making himself sound correct.
I think the most challenging part of all this is what follows. Bob your are an economist and you understand the economy like no other. You are great. The problem is we don’t have an economy. We have socialism, powered by global digital fiat with fractional reserve less banking and tons of intervention. This tends to short circuit normal economic reality’s.
A guy like lKeynes does not care that he has forfeited freedom for state control. He does not care that all market losses are redistributed amongst the whole, rather than to those who deserve the loss. SO in many respects lKeynes understands the modern system better than you although he is a godless communist with a penchant for boot licking…
I know, this is about the time I get booted from every blog I have ever been part of as the owners are usually above reproach.
Worry not Gamble. Bob is not like Gene Callahan. Say what you like about Bob — no really, go ahead –Bob is not a hypocrite.
Not sure what you’re talking about Ken B., but I get suspicious when you compliment me…
I mean, aside from any comment on how well you do it, you are actually serious about debate with those who disagree. Unlike some, including those who booted Gamble. Or some I could and have named. I think there is 0 chance you’ll ban Gamble.
LK: Are you claiming that a fix price is the same as a markup price?
I always thought that a markup price is based on the cost of input plus a fixed percentage for profit. So you seem to implicitly assume that the cost of input is fixed as well? In what world are the costs of capital, energy, steel, or whatever other commodities that are used as inputs, fixed? Communist North Korea?
Plus, my grandpa was a farmer. Although he would have probably wanted to, he had no control whatsoever over the prices of his apples and pears. If that were possible, there would be no need for futures markets.
What am I missing?
“Mark-up” price means a price set in an ex ante manner by a business before transactions take place, based on total average unit costs plus a profit mark-up, at a given, estimated, projected or target quantity of output or level of sales.
Empirical evidence shows us that mark-up prices are generally inflexible with respect to demand, but tend to change — though it is by no means a necessary or universal process – when total average unit costs change or when the business wants to change its profit markup.
But plenty of factors restrain price increases too: falling total average unit costs when output is rising, fear that competitors will not raise prices and so on.
Since no Post Keynesians “assume that the cost of input is fixed as well”, you comment just shows your ignorance of
Points all well taken, but so what? What specific examples can you provide?
I bought a big ass flat screen TV last year, and now I can buy an even bigger ass flat screen TV for half the price. I’m pretty sure that the producers of these TV’s are “marking up” their prices all this time. So what?
I would agree that car manufacturers and other producers have administered MSRP’s in an attempt to control prices. But in order for dealers to clear their lots, they almost always have to adjust their prices to move the cars. Do you know anyone who ever paid MSRP?
Going back to grandpa, government administered minimum prices caused him and other producers to literally throw away millions of pounds of perfectly good fruit (Well, it went to the pigs…) , because after a good harvest, there wasn’t enough “demand” at the minimum price. Consumers were not allowed to enjoy this fruit at lower prices because a bureaucrat had decreed a minimum price to protect, hmmm, to protect what or who exactly?
Perhaps the conclusion is that the more free the market and the more perishable its product, the more flexible its prices will (have to) be?
Have you ever sat on an airplane next to someone who paid the exact same amount for their seat? Didn’t think so.
And you are right, I am ignorant of (Post) Keynesian theories (And I am certainly not as smart as most of the posters here, remember I am only a farmers boy…), but I am curious about them. They seem to make no logical sense, and yet, TPTB and you follow them religiously.
You seem very smart and yet, you absolutely make no sense. For now, it’s Austrians 1, (Post) Keynesians 0.
He wants a utopia where things don’t change and you can check your brain and soul at the door. He wants it all centrally planned.
Go study a bee hive.
“Change its profit make-up”
Why? Sudden desire for less profit?
Let’s say as an example they decide on the basis of declining ROI in their industry. This looks like an exogenous decision but isn’t. Why has Roi declined? Lower sales or lower profits.
Conversely for raising planned ROI.
BTW, I can’t find the terms “market clearing” or “market clearing prices” in the Huerta de Soto book. What an idiot.
Fixprice alert!!!! Super Bowl ticket prices plunged in anticipation of a winter storm and cold. Now, prices have surged due to a prediction of 50 degrees F. for Sunday. It’s all so confusing and inexplicable.
http://money.cnn.com/2014/01/31/news/economy/super-bowl-tickets/
lol … Rubbish! Silly Roddis, Super Bowl tickets clearly weren’t included in those surveys, so fixprice rules don’t apply.
Sunstein http://www.bloomberg.com/news/2014-01-30/how-to-spot-a-paranoid-libertarian.html
Sunstein uses Snowden as an example?
That’s particularly silly even for him.
I particularly recommend the linked Wilentz piece to Daniel Kuehn.
Yeah, it contains gems like “The Walther P22, a fairly standard handgun, is not especially fearsome, but Snowden’s affection for it hinted at some of his developing affinities.”
Is this a joke?
More broadly, I can never tell if Sunstein is pulling our legs.
Greenwald is a liberal. He’s just one of those weird ones with a fetish for the rule of law.
“The files leaked so far strongly indicate that the U.S. intelligence system, although in need of major reform, is not recklessly spying on its citizens. The President’s Review Group on Intelligence and Communications Technologies found serious problems with the NSA’s data collection, and recommended, among other restrictions, outlawing the NSA’s practice of amassing and storing the phone records of virtually all Americans.”
That’s hilarious.
Damn us paranoid libertarians! lol.
Dear Lord Keynes,
Surveys are not economic statistics because they don’t measure any real world phenomenon. You are very mistaken in using them as “evidence” in your theories. They cannot be evidence for any economic theory, because they aren’t measuring any economic phenomenon. They ask what someone would do, but this is hypothetical. Therefore, they are useless in making any determinations about the real world. People often don’t do what they say. Also the conditions in which the survey asks them about are unrealistic because they obviously ignore a myriad of economic factors that come into play when making decisions in the real world. Stop saying that certain prices don’t obey the laws of economics. It makes you seem completely ignorant.
But then he IS ignorant….of economics.
More cogent and substantial criticism in your first sentence than in 8 miles of scrolling commentary from Bob Roddis or Major Freedom.
Actually what Hank said in that first sentence is not correct. Answering surveys is indeed included in economics, because answering surveys is an action. Hank is claiming , incorrectly, that only prices are included in economic study.
My argument is that survey answers regarding pricing actions, are not necessarily consistent with the pricing actions themselves.
I suppose it should go without saying that I am not surprised that you would not understand the above, and would rather waste your time finding ever new ways to make unfunny, churlish jabs.
I agree answering questions is an action, but it is definitely not exclusive to economics. I respectively disagree that the mere answering of a question is an economic action. Among economic actions are: exchange, production, valuation, buying, selling, etc. I don’t think answering questions comes into this realm. I may be wrong.
“My argument is that survey answers regarding pricing actions, are not necessarily consistent with the pricing actions themselves.”
I don’t know what you mean by “consistent”, but these actions are obviously different.
I forgot to say thanks for the kind words Ken!
“They ask what someone would do, but this is hypothetical. “
Really? And yet the surveys — certainly the ones I point to abaove — also ask businesses what they ACTUALLY did do in the immediate past, such as the past year for few years.
Yet according to you “don’t measure any real world phenomenon.”
I expect the business people were all lying, were they?
The implication of surveys contradicting actions is not necessarily lying.
The PPI is sufficient to refute the claim that producers do not reduce their prices.
You predictably ignored the other part of my analysis:
“the conditions in which the survey asks them about are unrealistic because they obviously ignore a myriad of economic factors that come into play when making decisions in the real world”
If the survey only asked the response of an employer of an increase in demand there a number of obvious problems.
1. An increase in demand in this specific instance has no necessary correlation to the GENERAL demand.
2. The business owner may or may not have an understanding of what demand means in relation to economics. He may have not ever taken an economics course.
3. An increase in demand never happens in isolation. A number of economic factors may be changing at the same time that also effects the price.
Here is a list (not comprehensive) of what may happen along with an increase in demand in the real world:
1. Increase or decrease in supply
2. Increase or decrease in cost
3. Increase or decrease in price
4. The interrelation of all of the prices involved in the production of the good, which are also dependent on all that was listed above.
Obviously the survey is a gross simplification that has no relation to the real world.
Why is it, LK, you’re usually reduced to little more than calling arguments “rubbish” or appeals to incredulity?
http://www.washingtonsblog.com/2013/10/nsa-spying-did-not-result-in-one-stopped-terrorist-plot-and-the-government-actually-did-spy-on-the-bad-guys-before-911.html
Just for example…
I live the logical retorts that are built into the URLs
According to this particular paranoid libertarian, the NSA has done exactly zero with respect to what the president and its supporters market as (national, not establishment security)
So what is this supposed benefit that paranoid libertarians would be downplaying with regards to illegal and unconstitutional spying on all Americans that must be lied about to justify?
The obvious answer is that there is no long-term benefit that Sunstein would admit to. But, I would read anything he might claim…so I could demolish it.
lK,
Will you answer my questions regarding your explanation of QE?
Why does the Central bank even do QE if it has no effect?
Does central bank perceive “assets” as junk, in exchange for something of value?
If “assets” were junk, then the how do the balance sheets truly balance, other than on paper? If “assets” were not junk, then why QE, is central bank wasting oxygen or worse, nefarious intentions?
How do we know banks would not have loaned even less than they are now, if their balance sheets contained said “assets” rather than new central bank cash?
How can we be sure QE has not encouraged banks to lend more, to non credit worthy demanders, ultimately creating inflation not in the form of stationary reserves, rather , in the form of new loans(money)?
lK I think it is crucial you justify your QE understanding. IF you have the wrong view of QE, then everything you say is askew…
(1) QE1 (though not necessarily in the exact form it was done) was certainly needed to stop the financial system from collapsing and restore interbank lending.
It also helped to keep yields low.
Post Keynesians, however, do not support QE as a means to directly increase aggregate demand (AD) and employment: QE is a **monetarist solution**, not a Keynesian one.
Keynesians generally support fiscal policy as the most reliable means of expanding AD, not monetary policy, which becomes ineffective when the money system is endogenous and demand for credit collapses or stagnates.
(2) that the Fed took on some junk assets is irrelevant. It is not a private bank.
(3) QE has lead to massive holding of reverses by banks, not massive credit expansion.
——
All in all, I don’t think you even understand the Keynesian position.
(1) Banks that make mistakes should go bankrupt. This provides incentives for banks to not overextend going forward.
(2) Yields should be set according to market forces, not government
(3) Aggregate demand should be set by market forces, not government.
(4) The Fed taking on junk assets does not mean that the costs of the mistakes go away.
(5) Of course increasing reserves means banks are holding onto more reserves.
(6) The Keynesian position is fallacious.
MF’s usual list of demands, but he left off a couple.
“The prohibitions on rape, murder, slavery, and extortion should be set by market demand not government.”
“The provision of legal rights like the presumption of innocence should be set by market demand not government.”
Typical Ken B eliciting an inconsistent ideology again.
Translation of the above:
The prohibitions on rape, murder, slavery and extortion should be monopolized and hence undersupplied in accordance with Ken B’s understanding of monopolies.
The provision of legal rights like the presumption of innocence should be monopolized and hence undersupplied in accordance with Ken B’s understanding of monopolies.
——————
Yes, protection against murder, rape, slavery and extortions is overrated isn’t it? After all, that’s why Ken B wants them to be undersupplied via monopolies.
LK – now that your list of assertions has been revealed to be just that, would you mind dealing with all the other objections posed on here? I realise you are not in the comfort zone of your on blog, however I doubt that’ll hinder the indubitable truth of post-keynesianism from shining through. 🙂
Bookum Dano…
So the next time you think Central bank buying up bad debt has no effect, realize how local guv gets its funding. If you think it is all from taxpayer you are severely mistaken. I have followed the money and there is clear cut path from Bernanke to a small town of 1500 and everywhere in-between. You would not think the central bank causes government bloat, but it does. You wonder where all the inflation went? Well it gets destroyed quicker than they make it and it takes your wealth along for the ride. There is a reason why sound money is paramount to liberty…
http://news.yahoo.com/blogs/oddnews/police-officer-hacks-off-woman%E2%80%99s-hair–gets-fired–with-video–211931635.html
Obamacare and choices. http://hotair.com/archives/2014/02/04/white-house-when-you-think-about-it-2-5-million-fewer-people-working-because-of-obamacare-is-good-news/
As a non rothbardian opponent of Obamacare I get to say “I told you so”. Major freedom alas does not; economics is not predictive science.
“Obamacare and choices. http://hotair.com/archives/2014/02/04/white-house-when-you-think-about-it-2-5-million-fewer-people-working-because-of-obamacare-is-good-news/
As a non rothbardian opponent of Obamacare I get to say “I told you so”. Major freedom alas does not; economics is not predictive science.”
I am not sure what point you’re trying to make. What would preclude Rothbard from doing so? I don’t think you understand the Austrian position if you’re under this impression.
Major Freedom is Rothbard? Insert obligatory brain dead joke here.
Can’t have it both ways. If economics doesn’t make predictions you can never say told ya so. Because you never tell me so to start with.
“Exactitude, verifiability, and quantifiable arguments. ”
Again – how does it add these? This is the same as the arguments for parsing Austrian econ in symbolic logic. These are the touted benefits, but where’s the evidence for them, particularly with regard to financial and mainstream economic models?