Wait.
So according to Gesell, the value of money continuously rises because the supply of goods is continuously shrinking (as they “rot and can be destroyed by natural disasters”). But doesn’t this mean that production doesn’t exist!? Wow. I really underestimated this guy.
But if the supply of goods were continuously shrinking (and never being replaced by production) then wouldn’t prices rise, thus the purchasing power of money fall? Seems like this guy got everything backwards.
Human nature and laws of human action do in fact exist. Furthermore, the idea of replacing entrepreneurs with engineers is absolutely ridiculous.
I believe that the point wasn’t that Ricardo and Smith were bad, merely that Rothbard disapproved of them, right?
They were probably better than many modern economists. Also, given how much use Mises makes of Ricardo, I would definitely not place him on such a list.
I can’t disagree with your reasoning, I’m merely trying to elucidate what (I think) was meant by that previous poster.
Not sure I agree with the choice of Malthus. When referring to population growth rates he made no real scientific errors, he only failed to predict the agricultural revolution. Ben Franklin provided him with much of the population data from the colonies but supposedly the data collectors failed to decipher between birth rates and immigration thus rendering an extremely bleak picture. You have to remember that before his writing the public operated under the impression that there was a negative population growth rate. Even the statisticians of the time only believed that the population would only double every 400-600 years. Thus to point out that population growth was exponential was a scientific achievement.
Further, I believe that Todd Buchholz pointed out that of the four stages of economic growth
That Malthus, writing in stage two, had cause for concern. It was the public that blew the problem out of proportion.
Conza, I think Bert was alluding to the following famous Rothbard quote:
“The problem is that he [Smith] originated nothing that was true, and whatever he originated was wrong; […] For Smith not only contributed nothing of value to economic thought; his economics was a grave deterioration from his predecessors: […]” (Economic Thought before Adam Smith, pp. 435/6)
Mises was merely saying that Smith is now obsolete; Rothbard’s criticism is much harsher.
I know the quote well & believe the other one I mentioned from Mises, is the exact one he was referring too.
You could do worse than study Euclid if you are interested in Math. His book is but a small piece of the puzzle, [which is what Miises was saying], but it still holds up.
“You won’t learn anything you don’t already know by reading Smith” is much closer to the Rothbard quote than to the Mises quote. It’s Rothbard who implied that someone who has read the Spanish scholastics, Cantillon, Turgot etc. won’t learn anything by reading Smith. Mises, on the other hand, was merely saying that modern economists know things that Smith didn’t know; this is compatible with the assumption that someone who has read modern economists can learn something by reading Smith. (In fact, Mises explicitly urged his contemporaries to read Smith.)
Might I ask what particular criteria qualify Lucas for the dishonourable mention?
What did Kaldor and Lucas do?
Those are the two I was referring too, I remember them now from The Quotable Mises.
No, the whole thing is one absurd fallacy. Human beings are not like rats, who mindlessly and uncontrollably multiply in the face of new food supplies. In fact, we do the exact opposite (which you mention). Either way, even if we choose to ignore this, he would still be responsible for introducing two other preposterous fallacies (paradox of thrift, and the belief that too much wealth causes depressed business activity). I think there’s a strong case for Malthus at #1.
Three reasons: (1) the belief that rational calculation is always possible, and that people do not make systemic errors when predicting the future, is the ultimate straw man, which statist’s have been (successfully) attacking for quite some time (the behavioral school); (2) it prevents free market economists, who have been poisoned by this nonsense, from understanding the true effects of inflation, and the role (and even existence) of radical uncertainty. (3) There is no future general equilibrium which the economy moves towards in a stochastic process.
Quote: “The Malthusian law of population is one of the great achievements of thought. Together with the principle of the division of labor it provided the foundations for modern biology and for the theory of evolution…The objections raised against the Malthusian law as well as against the law of returns are vain and trivial. Both laws are indisputable. But the role to be assigned to them within the body of the sciences of human action is different from that which Malthus attributed to them.”
Ludwig Von Mises
Human Action
Chapter XXIV, Section 2. Page 663
-664
I cant stand Samuelson, extremely vain, got high on his own positivism, but his eyes couldn’t interpret a single yard of the real world properly.
I too must say that Malthus is far, far, far from making in the top 10. His theory was correct back than (people stopped acting like rats only lately) and perfectly fitted what could be observed about population until the industrial revolution (only when people stopped behaving like rats, was the accumulation of capital though savings possible). Be it on this account, I‘m sure than many worse economists can be found to replace the guy.
Also I find it preposterous that we mention Ricardo here. Of course his labor theory of value was trash, but it wasn’t his theory, rather deals back at the very least to Smith (and probably to protestant thought, as Rothbard points out). On the other hand Ricardo’s theory of international trade was the very first scientific analysis of the division of labor and, indeed, the only proof that anarchy is viable as a social system. And we give this guy “dishonourable mention”?!
Emphasis on “garbled rehash”.
To make sure the above quote isn’t misinterpreted, Mises, unlike Rothbard, had great respect for Smith, and especially Ricardo.
QFT
Great, but Malthus was simply wrong. His logic may have been sound, on this issue, but his fundamental premise was incorrect: human beings are not like rats who continuously and mindlessly multiply. Either way, as I’ve already mentioned, even if we exclude the Malthusian trap, he is still responsible for all underconsumption/overproduction arguments (that the acquisition of too much wealth can cause depressed business activity), and for the so-called “paradox of thrift.”