Why is the austrian school unpopular

[Technocratic]

Again, the Austrians are not an empirical school of Economics. They say this themselves, quite openly at that, instead supporting philosohpical-deductive "axiom" economics. They are akin to Psychoanalysis and Marxism in insofar as they theorycraft ahead of time, make a whole bunch of assumptions, and then fit concepts and data into the schema.


This is the thought process of an Austrian Economist:

1. Develop a set of philosophical assumptions about the world.
2. Deduce principles generalized from these assumptions (call them axioms).
3. Develop a mathematical model with WHIZ BANG numbers, graphs, and phoney statistics to visualize these assumptions.
4. Attempt to solve problems in the real world by applying their deduced principles.
5. Ignore the effects of said applications and any empirical evidence that contradicts their models.
6. Continue to use the model.

Ironically, the aforementioned steps also reflect the thought process of Marxist Economists. Except Marxists pretend to be "scientific" while Austrians are more honest. They openly reject science.

 

[Harry Guerrilla]

When she was about 13, not when she was 6, and shipped accross the world to work for a family she did not know against her will and against her freedom

Your moving goal posts now.

Can I use that as an example of how Keynesian is exploitative of children too?

 

[Harry Guerrilla]

Quite they were not highly valued factors of production and were left to starve or move. Allowing for the English lords to reorganize the estates free of the lazy Irish tenants

If you bother to read the wiki article, it specifically states that the Irish were barred, by law, from owning parcels of property; extending a certain size and by locality to an incorporated city.

That violates the principle of ownership and non interventionism that is inherent in Austrian economics.

Had the Irish been able to own any size property as well as being treated as equal citizens under the law, they may not have consolidated their food source to, mostly potatoes.

 

[Harry Guerrilla]

Again, the Austrians are not an empirical school of Economics. They say this themselves, quite openly at that, instead supporting philosohpical-deductive "axiom" economics. They are akin to Psychoanalysis and Marxism in insofar as they theorycraft ahead of time, make a whole bunch of assumptions, and then fit concepts and data into the schema.


This is the thought process of an Austrian Economist:

1. Develop a set of philosophical assumptions about the world.
2. Deduce principles generalized from these assumptions (call them axioms).
3. Develop a mathematical model with WHIZ BANG numbers, graphs, and phoney statistics to visualize these assumptions.
4. Attempt to solve problems in the real world by applying their deduced principles.
5. Ignore the effects of said applications and any empirical evidence that contradicts their models.
6. Continue to use the model.

Ironically, the aforementioned steps also reflect the thought process of Marxist Economists. Except Marxists pretend to be "scientific" while Austrians are more honest. They openly reject science.

There are different views of Austrianism and if you pay attention to behavior economics.
You'll see a correlation between many Austrian beliefs and the findings of that field of economics.

Many Austrians do not openly reject science, that's an embellishment.
They reject the believe that all variables are present in modern "empirical" studies.

They also reject the utopian beliefs of Keynesianism which requires a corrupt body to act as perfectly moral and logical beings.

 

[Technocratic]

There are different views of Austrianism and if you pay attention to behavior economics.

There are also different varities of Communist, and they are all just as looney and academically unscientific.

You'll see a correlation between many Austrian beliefs and the findings of that field of economics.

You see a relationship of some ideas, yes. Unfortunately, a lot of mainstream economics isn't very rigorous either. It's slightly better than psychology, but no where near the hard sciences. However, Austrian Economics isn't as influential, or important, as some followers make it sound.

Economics in general falls into the same trap of making unfounded assumptions, models of those assumptions. They think a lot of graphs and math improve fuzzy, bad assumptions.

Many Austrians do not openly reject science, that's an embellishment.

I am sorry, they just openly reject the empiricism. You're right. :lol:

They reject the believe that all variables are present in modern "empirical" studies.

They reject far more than that. They went as far as to argue that it has no actual place in economics and that it is not just undesirable, but impossible. You can't take a system of thought seriously that does that.

They also reject the utopian beliefs of Keynesianism which requires a corrupt body to act as perfectly moral and logical beings.

They don't at all reject utopian beliefs. They just support a different utopia, one like Disneyland, but without the cute animatronics. In its place we get a magical world of infallible free markets, no-limits fallicies, and the omnibenevolent invisible hand.


But to characterize Keynsianism as utopic, or requiring a corrupt body to act perfectly moral...is itself an exaggeration of epic proportions. In fact, that's exactly what the Austrians believe, except replace "corrupt body" with "free markets, buyers and sellers." Keynsian, and the modern economic synthesis, proposes no such magical concepton.

 

[Harry Guerrilla]

There are also different varities of Communist, and they are all just as looney and academically unscientific.

Again not true, you're taking a part and applying it to a whole.

You see a relationship of some ideas, yes. Unfortunately, a lot of mainstream economics isn't very rigorous either. It's slightly better than psychology, but no where near the hard sciences. However, Austrian Economics isn't as influential, or important, as some followers make it sound.

It's pretty important, many of it's concepts flow from hard sciences.

Economics in general falls into the same trap of making unfounded assumptions, models of those assumptions. They think a lot of graphs and math improve fuzzy, bad assumptions.

I question assumptions, that is why I don't always accept empirical evidence as truth.
Did the writer ask all the questions?
How were the variables weighted?
It the writer known to be politically biased with his/her results?

All important questions before accepting "empiricism" on blind faith.

I am sorry, they just openly reject the empiricism. You're right. :lol:

Not true either.

They reject far more than that. They went as far as to argue that it has no actual place in economics and that it is not just undesirable, but impossible. You can't take a system of thought seriously that does that.

Some do, some don't.
Not all "empirical" evidence is actually creditable.
It must be reviewed by unfamiliar, differently biased people.

They don't at all reject utopian beliefs. They just support a different utopia, one like Disneyland, but without the cute animatronics. In its place we get a magical world of infallible free markets, no-limits fallicies, and the omnibenevolent invisible hand.

No creditable Austrian argues that free markets are infallible.
They argue that it delivers the best possible outcome.

Will there be negative outcomes for some people, of course.

But to characterize Keynsianism as utopic, or requiring a corrupt body to act perfectly moral...is itself an exaggeration of epic proportions. In fact, that's exactly what the Austrians believe, except replace "corrupt body" with "free markets, buyers and sellers." Keynsian, and the modern economic synthesis, proposes no such magical concepton.

Again there is no believe among creditable Austrians that free markets are infallible.
That is an exaggeration.
Free markets require inequality and failure.

For Keysianism to work correctly, there must be controllers that act within the guideline of it's system, without succumbing to giving favors to special industries and other interests.

Man is highly corruptible, putting him in the seat of a large amount of power is foolish.
The visible hand, must always be logical and right in his/her actions, with regard to a Keynesian economic system.

 

[Technocratic]

Well, right there is a good example. Austrian economics assumes the free market, unregulated, always provides the "best" alternative. That's an assumption with no merit. It's taken for granted. Now, a Keynsian needn't make that assumption. He need only assume that in some cases, government can have a positive impact and that an unregulated market needn't always provide an optimal solution.

We in fact know they don't: externalities. The question of efficient allocation of resources is also questionable, depending on how you define what is and is not efficient. The free market is surely an excellent mechanism for ensuring that pet rocks get made efficiently (sometimes). But unfortunately, pet rocks are stupid and wasteful.

It is usually the Marxists on the Left and the Free Marketeers on the Right who speak in terms of always and nevers, black and white.

 

[Harry Guerrilla]

Well, right there is a good example. Austrian economics assumes the free market, unregulated, always provides the "best" alternative. That's an assumption with no merit. It's taken for granted. Now, a Keynsian needn't make that assumption. He need only assume that in some cases, government can have a positive impact and that an unregulated market needn't always provide an optimal solution.

It does by default because the individual is deciding what is best for him/herself.
Making choices for other people doesn't offer this.

We in fact know they don't: externalities. The question of efficient allocation of resources is also questionable, depending on how you define what is and is not efficient. The free market is surely an excellent mechanism for ensuring that pet rocks get made efficiently (sometimes). But unfortunately, pet rocks are stupid and wasteful.

Stupid and wasteful to you.
Who are you to decide, what is best for other people?

Now when we consolidate our resources through a tax scheme, yes cost efficiency must be measured.
That's why Austrians tend to disfavor that approach with a lot of things.

It is usually the Marxists on the Left and the Free Marketeers on the Right who speak in terms of always and nevers, black and white.

I don't like to choose for other people, I don't like other people to choose for me.
That is essentially what makes it the best situation.

Not that there is a singular answer to every person's wants or needs but that there are many answers, for many people.

The singular answer to economic problems are that there are many answers.

 

[Khayembii Communique]

Onion Eater loves making completely unsubstantiated claims and then proclaiming victory. Coupled with his whining about other posts on other forums and his correlation of them not taking him seriously with the NAZI's burning books probably makes him my favorite poster here.

 

[Technocratic]

It does by default because the individual is deciding what is best for him/herself.
Making choices for other people doesn't offer this.

It's an assumption that people are actually deciding what's best for them, when demonstrably, that is often not the case. In fact, if that were the case, Americans wouldn't have such a problem with Obesity, which most people who are obese, significantly regret. We also wouldn't have the problem of externalities. In reality, consumers are often not rational agents, so any system that assumes they are, and from that assumes a free market always provides a "best result," automatically fails the reality test.

While free markets can be good and provide efficient use of resources, that's not always the case. Externalities are a clear example, most economists agree, of failures of a free market to efficiently deal with issues and allocate resources.

It's also difficult to get the consumers in the market to act as the regulators, because they are like herding cats. They either do not know what is going on, lack the resources, or they lack the ambition and coordination to act as a serious check on producers. Consumers will continue, in sufficient numbers, to shop at stores that are abusive, corrupt, and bad for society. Because they may be cheaper up front (even if the full costs are not paid until later). The market rewards those companies, the abuses continue.

Stupid and wasteful to you.
Who are you to decide, what is best for other people?

It's wasteful and stupid to any reasonable, thinking person. They aren't thinking. That's the problem. A lot of free market advocates assume the rationality of the consumer and that one always knows his interests best. That's not true. Information is limited, time is limited, and often, so is intelligence.

A doctor certainly knows what's better for your health than you do.

People tend to overlook the long-term consequences of their everyday actions, and they rarely, if ever, think of aggregate consequences. They lack the big picture, and thus, individually "rational" actions, and I use that term lightly, can become irrational and self-defeating.

I don't like to choose for other people, I don't like other people to choose for me.
That is essentially what makes it the best situation.

That's a very different understanding of the concept "best" than I have. Everyone deciding to do X, because it's in his interest to do so, may indeed screw everyone over in the end. In fact, we already see that happening. Within the confines of the short-term marking think, we have almost entirely failed to prepare for the future, because the "now" was valued more highly than the later. Classic inability to defer pleasure.


Sometimes the market leads to socially bad results, even though in the meantime, it may produce all the shiny pet rocks that make you feel warm and fuzzy inside.

 

[Patria Antiqua]

Because it's insane.

 

[Harry Guerrilla]

It's an assumption that people are actually deciding what's best for them, when demonstrably, that is often not the case. In fact, if that were the case, Americans wouldn't have such a problem with Obesity, which most people who are obese, significantly regret. We also wouldn't have the problem of externalities. In reality, consumers are often not rational agents, so any system that assumes they are, and from that assumes a free market always provides a "best result," automatically fails the reality test.

What is best to them is entirely subjective and may not actually be "best" health wise but it is the best choice for them at that moment.
There is no one best choice for all people.

No one can ever make perfectly rational decisions, that is part of why a managed economy is flawed.

Failures exist for a reason and are perfectly acceptable in a free market.

While free markets can be good and provide efficient use of resources, that's not always the case. Externalities are a clear example, most economists agree, of failures of a free market to efficiently deal with issues and allocate resources.

It's also difficult to get the consumers in the market to act as the regulators, because they are like herding cats. They either do not know what is going on, lack the resources, or they lack the ambition and coordination to act as a serious check on producers. Consumers will continue, in sufficient numbers, to shop at stores that are abusive, corrupt, and bad for society. Because they may be cheaper up front (even if the full costs are not paid until later). The market rewards those companies, the abuses continue.

It's called trial and error, it is part of the problem solving system.
Human participants in a market system largely use this unknowingly.
Sometimes it sticks, sometimes it doesn't.

It's wasteful and stupid to any reasonable, thinking person. They aren't thinking. That's the problem. A lot of free market advocates assume the rationality of the consumer and that one always knows his interests best. That's not true. Information is limited, time is limited, and often, so is intelligence.

A doctor certainly knows what's better for your health than you do.

People tend to overlook the long-term consequences of their everyday actions, and they rarely, if ever, think of aggregate consequences. They lack the big picture, and thus, individually "rational" actions, and I use that term lightly, can become irrational and self-defeating.

There are lots of things that are wasteful and stupid, televisions, air conditioning, ice makers, cars that exceed 55 mph, etc.

We don't define what is right or wrong based on arbitrary definitions of usefulness.
If we are, all a person needs is shelter (including clothing), water and food.
Should we now toss all "useless" things away because you say so?

Free markets require failures and require asymmetrical information.
Perfection is not obtainable.
It is the desire, of many participants, to seek perfection which is the best of Austrianism.

That's a very different understanding of the concept "best" than I have. Everyone deciding to do X, because it's in his interest to do so, may indeed screw everyone over in the end. In fact, we already see that happening. Within the confines of the short-term marking think, we have almost entirely failed to prepare for the future, because the "now" was valued more highly than the later. Classic inability to defer pleasure.

Trial and error, one mans loss is another mans gain.
In the future, some of them will learn to temper their chasing of irrational profitability.

Sometimes the market leads to socially bad results, even though in the meantime, it may produce all the shiny pet rocks that make you feel warm and fuzzy inside.

While in the short term, it may hurt.
The long term picture is what we're aiming for.
Learning to control the irrationality of people, through self selection.

 

[phattonez]

It is a cold and heartless school, where the weak and old would be put out to pasture to die. As anything else would be harmfull to the economy

Austrian economics does not make value judgments. That's not what the study of economics is about. Value judgments are for the philosophers.

 

[phattonez]

Austrian Economics is unpopular because I refuted their theory. Nobody wants to be associated with a loser.

You're hilarious. No one even knows you, much less bases their opinions of the Austrian school on your work.

 

[phattonez]

Onion Eater loves making completely unsubstantiated claims and then proclaiming victory. Coupled with his whining about other posts on other forums and his correlation of them not taking him seriously with the NAZI's burning books probably makes him my favorite poster here.

Did you just make me thank a dirty commie?

 

[phattonez]

Because it's quite literally the "Psychoanalytic" school of economics. It's a pseudoscience. It uses the language of science, but it actually dismisses empiricism as a valid methodology.

Actually, hard science rejects empiricism as a valid methodology. Sure, you can use empiricism to point you in the right direction to investigate something, but you can't prove anything from it solely. Correlation does not prove causation. If you are trying to prove that one variable causes another, you can't just use empiricism and show tight correlation to say that one causes the other. This is mostly what the other schools of economics do. You can't do this unless it makes sense. I can show that pool drownings and ice cream sales are correlated, but neither cause one another. Heat causes both. You need a strong underlying theory of human action to explain the correlation before your analysis is meaningful. Most other schools economics fail to recognize this.

Hayek and Von Mises, for example, actually argued against the application of empirical methods in Economics, claiming it was neither possible, nor desirable. Instead , they pushed for a rationalist axiomatic foundation. They put "theory" and deductive conclusoins above rigorous scientific methods. This is why many of their ideas aren't even falsifiable. They don't care to be, because "theory" steming from axioms, and deductions from them, are all that matter. They got one solution to every problem, and it's determined before any problem is analysed. It never changes.

The Austrian School is the Marxism of the Right.

The "rationalist axiomatic foundation" is the only method that is based on solid logic. Since you can't experiment on humans, and since correlation can't prove causation, this is the only method of acquiring knowledge that is available to real economists.

 

[zimmer]

Because it's quite literally the "Psychoanalytic" school of economics. It's a pseudoscience. It uses the language of science, but it actually dismisses empiricism as a valid methodology. Hayek and Von Mises, for example, actually argued against the application of empirical methods in Economics, claiming it was neither possible, nor desirable. Instead , they pushed for a rationalist axiomatic foundation. They put "theory" and deductive conclusoins above rigorous scientific methods. This is why many of their ideas aren't even falsifiable. They don't care to be, because "theory" steming from axioms, and deductions from them, are all that matter. They got one solution to every problem, and it's determined before any problem is analysed. It never changes.

The Austrian School is the Marxism of the Right.

In Bold:

yeah... it's let people be free, get government out of the way because it causes problems, it is too slow to react, and there are solutions to problems government will never see or accomplish that the free market (motivated individuals) will produce... much, much faster and better.

A short example... the outdoor rink at Rockerfeller Center in NYC. They spent how many years tryong to get a slab of concrete set in the ground? Trump came in, took over the project (when some claimed he would do no better), and got the damn slab in the ground with all the extra's included. Take this simple scenario and run with it throughout society. Government is a slug, a 10,000 yard long tanker... it takes eons to turn the ship... whereas individuals are like a jet ski... flexible, nimble, and looking to provide more and better service.

von Mises was a socialist, but having studied the Austrian housing shortage and the ghetto like conditions of squalor his citizens had lived in, he came to the realization government was the problem... and nothing has changed since his awakening.

Why is the school unpopular? Perhaps it is because a bunch of socialists were polled.

.

 

[cpwill]

We never had a fully austrian economic policy either. The closest being the UK in the 1800's.

You know the country that ruled over Ireland during the great potato famine, a country that sent childern who were orphans, or from poor families to work in Cananda or Australia as indentued servants

ah. so the Corn Laws were prime examples of austrian economic policy?

 

[Lord Tammerlain]

ah. so the Corn Laws were prime examples of austrian economic policy?

Can you name a country in the last 200 years that had policies closer to Austriamn economics then Britain in the 1800's

Excluding modern city states like Hong Kong and Singapore

 

[phattonez]

Can you name a country in the last 200 years that had policies closer to Austriamn economics then Britain in the 1800's

Excluding modern city states like Hong Kong and Singapore

That's a weak argument and you know it. Just because something is closest to something, does not make that the definition of something.

 

[Lord Tammerlain]

That's a weak argument and you know it. Just because something is closest to something, does not make that the definition of something.

It of course is not the definition of it, but it is the closest example of Austrian economics in practice that we have when applied to a realistic country

 

[phattonez]

It of course is not the definition of it, but it is the closest example of Austrian economics in practice that we have when applied to a realistic country

So what? You can't base your opinions of the Austrian school on that.

 

[Lord Tammerlain]

So what? You can't base your opinions of the Austrian school on that.

Then what to base an opinion on?

Pure theory that places value only on wealth creation and economics while ignoring any sociological impacts those theories would have in practice?

 

[phattonez]

Then what to base an opinion on?

Pure theory that places value only on wealth creation and economics while ignoring any sociological impacts those theories would have in practice?

Like I said before, Austrian economics does not do any value judgments. Austrian economics is a specific methodology. If you see providing for the rich as being worth the cut in production it will necessarily create and the reckless behavior among youths that it will create as result (because no need to save if you will be provided for), that's fine. Austrian economics is just a method to show you the results. It doesn't say which is better. What you're looking at is trends among people who follow this school of economics, not the school itself.

 

[drz-400]

Actually, hard science rejects empiricism as a valid methodology. Sure, you can use empiricism to point you in the right direction to investigate something, but you can't prove anything from it solely. Correlation does not prove causation. If you are trying to prove that one variable causes another, you can't just use empiricism and show tight correlation to say that one causes the other. This is mostly what the other schools of economics do. You can't do this unless it makes sense. I can show that pool drownings and ice cream sales are correlated, but neither cause one another. Heat causes both. You need a strong underlying theory of human action to explain the correlation before your analysis is meaningful. Most other schools economics fail to recognize this.

The scientific method does not reject empiricism. It is essential to the scientific method that hypothesis and theories be tested by observations.

The "rationalist axiomatic foundation" is the only method that is based on solid logic. Since you can't experiment on humans, and since correlation can't prove causation, this is the only method of acquiring knowledge that is available to real economists.

No truth can be known except the truth that none can be known. How can rationalism appeal to you after making the classic argument of philosophical skepticism?