Why is the austrian school unpopular

[phattonez]

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

Observations where you can isolate variables though. You cannot do this with human behavior, it is impossible to experiment on. You can study it, but you can't experiment because observing human behavior changes it. Austrian economics does not completely ignore empiricism, it just gives it a smaller role, much like how a biologist would use empiricism. Sure, it's good for noticing things, but you can't really prove anything until you experiment. With Austrian economics, replace experiment with deduction, and there is your methodology.

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?

Many truths can be discovered by deduction from the self-evident truths that we already know.

 

[drz-400]

Observations where you can isolate variables though. You cannot do this with human behavior, it is impossible to experiment on. You can study it, but you can't experiment because observing human behavior changes it. Austrian economics does not completely ignore empiricism, it just gives it a smaller role, much like how a biologist would use empiricism. Sure, it's good for noticing things, but you can't really prove anything until you experiment. With Austrian economics, replace experiment with deduction, and there is your methodology.



Many truths can be discovered by deduction from the self-evident truths that we already know.

Ok, well this is completely different than rejecting empiricism. You accept that both knowledge can be found from observation(experiment) and deduction.

I just find it interesting that many in the Austrian school will say, "you can never know everything about the market. You will never be able to measure all of the variables, account for them, etc because no one can keep track of everything in the market place." Basically they are saying humans cannot understand the complexity of the economy. This is a classic argument of philosophical skepticism, that no truth can be knowable, and then they will appeal to a rationalist point of view that says reason is the source of all knowledge.

Basically that would be like saying, "You can't know anything about economics, it is too complex, but I was born with the ability to know everything about it."

 

[phattonez]

I doubt we'll ever know everything about the market (speaking in absolutes), but there are many truths we can discover. I just disregard the use of empiricism as the only source of knowledge. It's great for investigation, and can lead you in the right direction, but it alone cannot give you the correct answer unless the underlying theory that you are claiming makes sense.

So I wouldn't claim that knowledge comes from observation, but that observation helps guide deduction to find the correct answer.

 

[Onion Eater]

Did you just make me thank a dirty commie?

I didn't. Peter Boettke did.

Now that Boettke, the editor of the Review of Austrian Economics, has publically proclaimed his fealty to the communist cause, all his little minions like you are required to suck up to any communists they encounter on the internet.

Theodore Burczak’s Socialism after Hayek is the 2007 winner of the Smith Center Annual Prize in Austrian Economics.

Socialism after Hayek has been trumpeted as a “stimulating book” in the pages of the Review of Austrian Economics.

“Very deep” gushes Steve Horwitz, the organizer of a conference at the Institute for Humane Studies to promote this latest advance in Austrian Economics.

Theodore A. Burczak's Socialism after Hayek is a thoroughly researched and thoughtful examination not only of the ideological debate that framed the twentieth century, but of Hayek's intellectual framework. Burczak hopes for an economic framework that is both humanistic in its approach and humanitarian in its concern while being grounded in good reasons. The book should be on the reading list of every comparative political economist and in particular anyone who wants to take Hayek seriously, including those who would like to push Hayek's classical liberal politics toward the left in the twenty-first century. Burczak has made an outstanding contribution to the fields of political and economic thought and to Hayek studies in particular.

"Two-faced" is the kindest word I can think of to describe Boettke and his minions, like Phattonez.

Because it's insane.

Hypocritical is a better word. The Austrian leadership has lied through their teeth to get the blue-collar, tea-bagger types to believe that they support limited government while, in reality, they are promoting communism, as their academic writing makes clear.

But academic writing is a closed book to their semi-illiterate followers. Joe Plumber can't actually recognize communism unless it is specifically labeled as such. He's so dumb, he'll rally around anybody who waves the Gadsden flag, whatever their actual agenda is.

Deception is the key to the popularity that Austrian economics enjoys.

 

[Technocratic]

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.

Modern science employs empiricism as part of its methodology, but I never said science = empiricism. What I said was that, based on the statements of the "founding fathers" of the Austrian movement, who are still worshipped today, empiricism and the scientific method were rejected in favour of something closer to Continental Philosophy, which isn't even analytical.

The problem with the Austrian school is all its math a modelling are based on dubious philosophical assumptions, and deductions from those, with no real regard for empirical testing.

 

[Technocratic]

Observations where you can isolate variables though. You cannot do this with human behavior, it is impossible to experiment on. You can study it, but you can't experiment because observing human behavior changes it. Austrian economics does not completely ignore empiricism, it just gives it a smaller role, much like how a biologist would use empiricism. Sure, it's good for noticing things, but you can't really prove anything until you experiment. With Austrian economics, replace experiment with deduction, and there is your methodology.

And therein lies another problem: Austrians love to talk about their self-evident truths. They claim things are self-evident that really aren't, so they can get around having to provide an empirical foundation for their work. It's easy to claim something's so self-evident, it needed be proven. Any system that creates models on dubious self-evident "axioms" without regard to how the models work in the real world is just bad academics.

That's a problem not just with economics, but with a good deal of the Social Sciences. Only, Austrian Economics comes out and admits it.

Austrians can say whatever they want and justify it with appeal to philosobabble theory. Whether not claims about "freedom" and how thinks work" don't need to match reality, because theory = reality. Being wrong about the facts or how things work in reality doesn't phase them.

As Milton Friedman noted, the Austrian business Cycle theory is wrong. It is contradicted by actual empirical evidence. But since empirical evidence is irrelevant to Austrian Psychobabblology, it's ignored, and the Austro-quacks continue to advocate the same bogus, debunked theory.

And Milton Friedman is no Socialist commie pinko.


http://econfaculty.gmu.edu/bcaplan/whyaust.htm

 

[phattonez]

Now that Boettke, the editor of the Review of Austrian Economics, has publically proclaimed his fealty to the communist cause, all his little minions like you are required to suck up to any communists they encounter on the internet.

I "sucked up" to him because he made fun of your idea that you single-handedly destroyed Austrian economics when no one has even heard of you.

 

[phattonez]

Modern science employs empiricism as part of its methodology, but I never said science = empiricism. What I said was that, based on the statements of the "founding fathers" of the Austrian movement, who are still worshipped today, empiricism and the scientific method were rejected in favour of something closer to Continental Philosophy, which isn't even analytical.

The problem with the Austrian school is all its math a modelling are based on dubious philosophical assumptions, and deductions from those, with no real regard for empirical testing.

You can't do empirical testing because there are far too many variables to possibly be isolated. It is impossible to experiment on human behavior.

Could you give an example of one of those "dubious philosophical assumptions?"

 

[phattonez]

As Milton Friedman noted, the Austrian business Cycle theory is wrong. It is contradicted by actual empirical evidence. But since empirical evidence is irrelevant to Austrian Psychobabblology, it's ignored, and the Austro-quacks continue to advocate the same bogus, debunked theory.

Milton Friedman never debunked ABCT. As Murray Rothbard points out there was a ton of monetary inflation in the 1920s. Furthermore, Milton Friedman is at a loss to explain the growth this country experienced during the deflationary period known as the Long Depression.

 

[Technocratic]

You can't do empirical testing because there are far too many variables to possibly be isolated. It is impossible to experiment on human behavior.

No, what this is saying is: "the social sciences cannot perfectly control every variable, therefore, let's throw out any regard for empirical support." Therefore, Austrians totally ignore whether or not their models are accurate in the real world, so long as they accurately stem from their theoryland.

Real science observes the world and crafts a theory to explain, predict what is seen. Austrian Economics is pseudoscience, because it crafts a theory, then fits in reality, while ignoring any data that don't confirm the theory because "testing is impossible."

If testing is impossible, than the system is worthless. It's on the level of Freudian Psychoanalysis. If you cannot empirically test the model, then you can neither validate/support nor falsify it.

Could you give an example of one of those "dubious philosophical assumptions?"

Markets always provide the best outcomes. That's essentially philosobabble based on values assumptions. Regardless, the total rejection of science

 

[phattonez]

No, what this is saying is: "the social sciences cannot perfectly control every variable, therefore, let's throw out any regard for empirical support." Therefore, Austrians totally ignore whether or not their models are accurate in the real world, so long as they accurately stem from their theoryland.

Real science observes the world and crafts a theory to explain, predict what is seen. Austrian Economics is pseudoscience, because it crafts a theory, then fits in reality, while ignoring any data that don't confirm the theory because "testing is impossible."

If testing is impossible, than the system is worthless. It's on the level of Freudian Psychoanalysis. If you cannot empirically test the model, then you can neither validate/support nor falsify it.

Just because something cannot be proven, does not mean it is worthless. Furthermore, you are ignoring the fundamental flaw in using empiricism to model human behavior. You are making another argument that gets around the issue, but until that issue is addressed the flaw in empiricism has still not been dealt with.

Markets always provide the best outcomes. That's essentially philosobabble based on values assumptions. Regardless, the total rejection of science

That's not an assumption of the Austrian school. Furthermore, best is very vaguely defined. The idea that markets always provide the best outcomes is an opinion held by some in the Austrian school based on the ideas of mutually beneficial exchange.

 

[Technocratic]

Just because something cannot be proven, does not mean it is worthless.

I didn't mean that the theories had to be positively proven. I am not a logical positivist. I meant that the usefulness, and predictive power, of a theory is very limited if you cannot test it empirically. Even if this means following a concept of falsification. You cannot properly falsify theories if you refuse to, or dismiss, empirical testing.

Furthermore, you are ignoring the fundamental flaw in using empiricism to model human behavior. You are making another argument that gets around the issue, but until that issue is addressed the flaw in empiricism has still not been dealt with.

Of course there are limitations: both ethical and practical when dealing with populations of people. They aren't dogs. However, empirical testing is fundamental to any useful science. Any science that isn't empircal...isn't science. It's pseudoscientific philosophy. You can certainly apply empiricism to human behaviour, and even if we could not apply hard sciences' level of controls, due to the variables at work and ethical limitations, limited empiricism is stll better than none at all.

This is why psychology, limited as it is, and certainly less credible than Biology, is still superior many other social sciences. Look at Sociology. It's a total mess of axioms and competing schooent thought which leads to contradictry theory with no regard for testing claims. It leads no where. Economics is getting to look like Sociology.

At best, even if you have limited application of the scientific method to economics, it's valuable purely for it's ability to contradict claims. Economists have a habit of pointing to models to create policy, and then ignoring when their policies fail. If your policy doesn't do what your principles say they do, they are flawed. If we don't use empirical testing, we cannot improve anything, ever. No science can provide useful services to humanity if the claims aren't subjected to scrutiny. We cannot continue to operate on the current methods of Economics, much less fringe economics that are even less rigorous.

Philosophy as a basis for detailed public policy isn't very good, becaues it's a whole lotta talk that goes nowhere.

 

[phattonez]

I didn't mean that the theories had to be positively proven. I am not a logical positivist. I meant that the usefulness, and predictive power, of a theory is very limited if you cannot test it empirically. Even if this means following a concept of falsification. You cannot properly falsify theories if you refuse to, or dismiss, empirical testing.

Then why does economics, which routinely uses empiricism today, have so much debate still over issues? You would think that empiricism would show you easily whether a theory was wrong. However, we have competing theories existing at the same time, and both have empirical evidence. This should lead you to believe that empiricism isn't the end-all be-all as you make it to be.

Of course there are limitations: both ethical and practical when dealing with populations of people. They aren't dogs. However, empirical testing is fundamental to any useful science. Any science that isn't empircal...isn't science. It's pseudoscientific philosophy. You can certainly apply empiricism to human behaviour, and even if we could not apply hard sciences' level of controls, due to the variables at work and ethical limitations, limited empiricism is stll better than none at all.

Easy response then: economics is not a science, if that is what you must use as the definition of science. This isn't a contention.

This is why psychology, limited as it is, and certainly less credible than Biology, is still superior many other social sciences. Look at Sociology. It's a total mess of axioms and competing schooent thought which leads to contradictry theory with no regard for testing claims. It leads no where. Economics is getting to look like Sociology.

Yes, you're right, this is what economics IS like. Not what it is getting to look like, IS like. I mentioned just before that multiple competing theories exist about issues, all with empirical evidence. So empiricism can't be the answer, using it to find answers seems to be flawed. Deductive reasoning then would seem to be the only approach. Empiricism is only useful for showing interesting trends, it can never be used for causation. Too many variables go into human behavior that we cannot possibly control them all, so we will always get mixed results when using empiricism to talk about economics.

At best, even if you have limited application of the scientific method to economics, it's valuable purely for it's ability to contradict claims. Economists have a habit of pointing to models to create policy, and then ignoring when their policies fail. If your policy doesn't do what your principles say they do, they are flawed. If we don't use empirical testing, we cannot improve anything, ever. No science can provide useful services to humanity if the claims aren't subjected to scrutiny. We cannot continue to operate on the current methods of Economics, much less fringe economics that are even less rigorous.

Imagine if you were to institute a minimum wage in your small town. Months before it went into effect let's say you had 5% unemployment. Then it goes into effect, and a few months after the company that owned the factory in that town went bankrupt. It hired a lot of people, and now your small town is at 8% unemployment. Now, does that mean that the minimum wage caused unemployment to rise? Not necessarily. There is absolutely no way for you to isolate the unemployment due to minimum wage and unemployment due to other causes. Empiricism in this discussion then would be absolutely worthless.

Philosophy as a basis for detailed public policy isn't very good, becaues it's a whole lotta talk that goes nowhere.

From what I've heard from you before, you just don't know how the Austrian methodology works, you don't even understand the assumptions, so of course you would think that.

 

[Technocratic]

Then why does economics, which routinely uses empiricism today, have so much debate still over issues? You would think that empiricism would show you easily whether a theory was wrong. However, we have competing theories existing at the same time, and both have empirical evidence. This should lead you to believe that empiricism isn't the end-all be-all as you make it to be.

Because the standard of science in most of the Social Sciences is not very high, and it's only recently improved. There is still a legacy of "philosophy" and to overcome. However, the difficulty and limitations of the Social Sciences today been magnified the rise of Post-Modernism as a system of thought that openly rejects science. Social Science is undoing its progress (movement toward the use of rigorous scientific standards) by reverting back to philosobabble.

Modern Economics, like Austrianism, is plagued by bias, political convenience, and low academic standards, which is why many "mainstream" economists make claims with either no objective data to back it up or are wrong, but still used anyway.

My original point was ot that mainstream economics applies it perfectly, but that Austrianism is worse because it openly rejects the concept of scientific rigor in the first place. You cannot improve without openness to change.

Easy response then: economics is not a science, if that is what you must use as the definition of science. This isn't a contention.

Well, Austrian Economics isn't science, definitely. Mainstream Economics is a Social Science, although very flawed. Economcis does try, and succeeds to an extent, in using the Scientific Method.

Yes, you're right, this is what economics IS like. Not what it is getting to look like, IS like. I mentioned just before that multiple competing theories exist about issues, all with empirical evidence. So empiricism can't be the answer, using it to find answers seems to be flawed. Deductive reasoning then would seem to be the only approach. Empiricism is only useful for showing interesting trends, it can never be used for causation. Too many variables go into human behavior that we cannot possibly control them all, so we will always get mixed results when using empiricism to talk about economics.

As I said above, there has been improvement, but only because Economics is slowly evolving toward a rigorous scientific standard. It's not perfect, but Austrianism is a total reversal of all progress. Competing theories and dogmatic ideologies in economics are product of is young nature as a science. Empiricism isn't the flaw, its the lack of serious adoption that's the problem. The problem is actually the lingering philosophical nature of the original Economics combined with a lack of concern for actual science and practical limitations, yes. But that doesn't imply the deductive philosophical option is better.

Going "well, there are so many variables to control, we can't apply perfecte should just give up and make **** up and deduce principles from the land of Fey. We already know what that system is like, because it still plagues economics today. How will going back to the flawed roots solve the problem? We still remain with a system that has no real predictive power or the ability to change because it's all philosophical debate?

Imagine if you were to institute a minimum wage in your small town. Months before it went into effect let's say you had 5% unemployment. Then it goes into effect, and a few months after the company that owned the factory in that town went bankrupt. It hired a lot of people, and now your small town is at 8% unemployment. Now, does that mean that the minimum wage caused unemployment to rise? Not necessarily. There is absolutely no way for you to isolate the unemployment due to minimum wage and unemployment due to other causes. Empiricism in this discussion then would be absolutely worthless.

Even if empirical measurement were totally worthless for answering the question, and I disagree in this case, it doesn't imply the alternative fixes anything. It just gives the illusion of fixing a problem by appealing to a concept. You still wouldn't know if it's true or false.

The empirical data indicate that raising a minimum wage may sometimes lead to unemployment, depending on if there are other economic factors at play. Min. Wage labour seems inelastic. This knowledge is valuable itself. A theory which says "x will do y" because it is deduced from some abstract philosophical position doesn't make the reality any clearer. It's like religion: it gives a feeling of certainty where there is none.

From what I've heard from you before, you just don't know how the Austrian methodology works, you don't even understand the assumptions, so of course you would think that.

But philosophy doesn't go anywhere, except round and round. I am familiar with the basic concept of Austrian Econonics, and it's not empirical. I don't really care to get into the nitty gritty of specific assumptions and principles, because I reject it methodologically anyway.

 

[phattonez]

Because the standard of science in most of the Social Sciences is not very high, and it's only recently improved. There is still a legacy of "philosophy" and to overcome. However, the difficulty and limitations of the Social Sciences today been magnified the rise of Post-Modernism as a system of thought that openly rejects science. Social Science is undoing its progress (movement toward the use of rigorous scientific standards) by reverting back to philosobabble.

Modern Economics, like Austrianism, is plagued by bias, political convenience, and low academic standards, which is why many "mainstream" economists make claims with either no objective data to back it up or are wrong, but still used anyway.

My original point was ot that mainstream economics applies it perfectly, but that Austrianism is worse because it openly rejects the concept of scientific rigor in the first place. You cannot improve without openness to change.

Disregarding your opinions on Austrian economists specifically for the time being, you think that this still does not occur in the field of economics still? Marxists have data, modern Keynesians have data, monetarists have data, etc. So what's your point? The data is not conclusive enough to get a result that everyone can agree on. In real sciences like physics and biology and chemistry you have this. You cannot do this with economics. There is no way around that. You can't isolate all of the variables that influence human action. Economics will never be conclusive if you are trying to use data to form theories. Never.

Well, Austrian Economics isn't science, definitely. Mainstream Economics is a Social Science, although very flawed. Economcis does try, and succeeds to an extent, in using the Scientific Method.

Who cares if it's science or if it isn't science. Modern economics is a flawed science for the reasons I have said, so to state that it is better because it is science is drawing a conclusion based on a claim that was never made. For that conclusion to be true, you would have to state that something that is science is inherently better at predicting truth than something that isn't science, and that even if the science is flawed it is better than that which uses another method to get around that flaw. You will never be able to prove that claim.

As I said above, there has been improvement, but only because Economics is slowly evolving toward a rigorous scientific standard. It's not perfect, but Austrianism is a total reversal of all progress. Competing theories and dogmatic ideologies in economics are product of is young nature as a science. Empiricism isn't the flaw, its the lack of serious adoption that's the problem. The problem is actually the lingering philosophical nature of the original Economics combined with a lack of concern for actual science and practical limitations, yes. But that doesn't imply the deductive philosophical option is better.

Going "well, there are so many variables to control, we can't apply perfecte should just give up and make **** up and deduce principles from the land of Fey. We already know what that system is like, because it still plagues economics today. How will going back to the flawed roots solve the problem? We still remain with a system that has no real predictive power or the ability to change because it's all philosophical debate?

Who's making "****" up? If you have problems with the claims that Austrians use to draw their conclusions, please state those claims and the problems with them.

Even if empirical measurement were totally worthless for answering the question, and I disagree in this case, it doesn't imply the alternative fixes anything. It just gives the illusion of fixing a problem by appealing to a concept. You still wouldn't know if it's true or false.

So the data can't prove anything either way. Okay, go on.

The empirical data indicate that raising a minimum wage may sometimes lead to unemployment, depending on if there are other economic factors at play. Min. Wage labour seems inelastic. This knowledge is valuable itself. A theory which says "x will do y" because it is deduced from some abstract philosophical position doesn't make the reality any clearer. It's like religion: it gives a feeling of certainty where there is none.

In other words, there is absolutely no way for this data to prove anything because you can't discover all of the other economic factors at play. It's simply impossible, there is too much going on in an economy.

Like I said before, the only possible problem that you could have with the Austrian position is the claims that they use to base their conclusions upon. If those claims are true, then all the claims of Austrian economics are true (unless you think that deduction and logic are false). So it comes down to this, what of the Austrian claims that they use to base their conclusions on are false, and why are they false?

But philosophy doesn't go anywhere, except round and round. I am familiar with the basic concept of Austrian Econonics, and it's not empirical. I don't really care to get into the nitty gritty of specific assumptions and principles, because I reject it methodologically anyway.

You reject deduction and logic? Because that is the only way to disagree with the methodology. The only way to disagree is to disagree with the claims that Austrians use to base their conclusions off of.