Has anyone else come across this video? What are some of the errors in his argument? I’ve never really got into the attacks on the Austrian Method much so this is a bit new to me. thx
here’s Wikipedia on what the scientific method is:
"Scientific method refers to a body of techniques for investigating phenomena, acquiring new[1] knowledge, or correcting and integrating previous knowledge. To be termed scientific, a method of inquiry must be based on gathering observable, empirical and measurable evidence subject to specific principles of reasoning.[2] A scientific method consists of the collection of data through observation and experimentation, and the formulation and testing of hypotheses.[3]
“Although procedures vary from one field of inquiry to another, identifiable features distinguish scientific inquiry from other methodologies of knowledge. Scientific researchers propose hypotheses as explanations of phenomena, and design experimental studies to test these hypotheses. These steps must be repeatable in order to dependably predict any future results.”
Sounds great, no? Repeatable experiments are the way to go, absolutely. So if we want to test a hypothesis of what caused the Great Depression, say too much money printing, we just take two identical countries and pump money into one but not the other. If the first economy collapses, causing mass unemployment and destruction of wealth, we know we are right. Of course other economists will want to verify the results, so they too will take two countires, similar in every way, and do the same thing we did. If doing this dozens of times always yields the same results, then we know something.
Several points:
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Austrians are not against experimentation and using statistics to determine human behavior. Austrians point out that individuals have tremendous variation in their preferences and actions. It is extremely difficult if not impossible to determine things like a demand function much less numerically evaluate the effects of a tax increase on 300 million people. And what are your standards of comparison. The previous response is also very true, it is not easy to have two economies side by side to compare the effects of policies on one another.
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What is wrong with 16th and 17th century philosopy better known as Enlightenment Philosophy? Jefferson, Locke, Smith etc seemed to me to be quite smart. The Western World has pulled humanity out of poverty in less than 200 years with this philosophy. Unfortunately it is now using these emperical and/or positivists approaches to economic science and the Western World is now mired in debt and devalued money.
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Austrian economics are based on the interractions of individuals, focusing on two specifically: Consumers and Entrepreneurs. Other “schools” of economics do not even mention these individuals. When does Keynes who seems to be in vogue with the current policy makers even mention Entrepreneurs as being critical to the growth and functioning of society?
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Look at what is happening today in economics. The Keynesians are making policy and the financial condition of the greatest economies the world has ever seen is deteriorating. I have not heard a peep from the Chicago School. Both seem to want more and more inflation to stimulate the economy back to health. It is only the Austrians who are recomending stopping the money creation and increasing debt. Who wil lbe right?
The Western World has pulled humanity out of poverty in less than 200 years with this philosophy.
Correlation is not causation. Liberalism and egalitarianism are intrinsically linked, and have been largely destructive (in addition to being ridiculously false). Most of the people whose ideas did support civilzation and free trade were aristocrats and people like Edmund Burke, who were distinctively opposed to Enlightenment liberalism and civic humanism.
Criticism of apriori methodology is one of the most common critiques of the Austrian school on the internet, but I think it often (if not almost always) is espoused by those who know relatively little about Austrian economics.
It’s easy to find a quote from Mises declaring that empirical knowledge is irrelevant, and from that rule out the Austrian school as little more than “fundamentalists” that “worship the market”. But in truth, Mises/Hayek/Rothbard/modern Austrians use empirical data all the time to further their arguments. The point that Mises stresses is that an over-reliance on statistics can easily lead to economic confusion unless we view those numbers through the prism of undeniable axioms based on human action.
Bob Murphy analyzes data from the Great Depression: http://mises.org/daily/4350
Tom Woods describes the Depression of 1920: http://www.lewrockwell.com/woods/woods125.html
“Liberalism and egalitarianism are intrinsically linked, and have been largely destructive (in addition to being ridiculously false).”
Do you feel that Gustave Molinari and the more radical liberal thinkers necessarily have such an intimate connection with egalitarianism? I know the connection with the promotion of democracy was an error common to both groups, who supported it on different grounds(with the egalitarians possibly being more ‘sensible’ in choosing it as a sensible means with regard to advancing their ends, charlatans that they were).
Liberalism and egalitarianism are intrinsically linked, and have been largely destructive (in addition to being ridiculously false).
Obviously, most people on this forum are liberals who distance themselves from egalitarianism, so your statement is quite jarring. How is liberalism linked to egalitarianism, and why is liberalism destructive and false? Perhaps you are tired of explaining this…
Most of the people whose ideas did support civilzation and free trade were aristocrats and people like Edmund Burke, who were distinctively opposed to Enlightenment liberalism and civic humanism.
Could you suggest a good place to start reading Burke? According to Henry Hazlitt, his entire works are essential to any “free man’s library.” Hazlitt writes of Burke:
"Many of us have been brought up to believe that, although Burke may have begun as a liberal (as exemplified in his speech on Conciliation with America), he ended as a vehement reactionary (as in his Reflections on the Revolution in France). Yet any open-minded reader, even though he is opposed to Burke’s main conclusions on the French Revolution, as William Hazlitt so strongly was, will agree with the latter that "in arriving at one error [Burke] discovered a hundred truths.Therefore, Hazlitt considered himself “a hundred times more indebted to [Burke] than if, stumbling on that which I consider as the right side of the question, he had committed a hundred absurdities in striving to establish his point.” We, too, I think, must agree, as Hazlitt did, with the judgment that in political philosophy Burke "was the most eloquent man of his time; and his wisdom was greater than his eloquence.
Burke in his later years was certainly a conservative; and the prominent inclusion of his works in a bibliography of freedom may seem to some readers, accustomed to associate the case for freedom with the case for “liberalism,” to call for explanation. But there is no necessary conflict between intelligent conservatism and real liberalism. On the contrary, at least in the peculiar climate and conditions of the present age, they have come to mean nearly the same thing."
I am guessing that you disagree with this characterization, and that in your view Burke was correct in becoming a “vehement reactionary” and/or “conservative.”
It seems to me that in the video he is using axioms of his own, in this case, that the scientific method and scientific theory is always the way to learn truth.
As he states, it is not that the Austrians have a problem with empiricism, but just that they have a problem with it in economics, due to the complexity of the process. Note that he never actually disagrees with Austrians on this. He never says that we can create perfectly reproducible experiments, or that humans today are the same as the same humans yesterday when it comes to market choices. The reason he cannot do this is he knows he would be wrong to state it.
It is certainly true that a priori reasoning alone fails if the axioms used are flawed, but no one disputes that a priori reasoning is useful. Even empiricism is based on a priori reasoning that the natural world can be understood by process of repeatable experimentation. If one didn’t believe that, empiricism would fail because one would never know if the repeated result was simply the result of God changing the rules to fool people.
He implies that a priori reasoning has no rules, but this is clearly false. I don’t even know how he could argue this point with any honesty. The entire point of using deductive reasoning is to make statements derive logically from axioms. Again, even in science you have to accept that you can deduce the nature of the world by repeatable experimentation or falsification.
In the video he ends by making an appeal that rationalism is false because it results in logic that produces reasons for a myriad of different religions, but that was in no way the result of rationalism. Religions existed long prior to the existence of rationalism. Not only that, rejections of religion are also done based on rationalism, you simply don’t accept the axioms of the religious.
Obviously, most people on this forum are liberals who distance themselves from egalitarianism,
Egalitarianism is the prime content of liberalism, ‘liberty’ is just to be free-of-something, and really doesn’t entail anything. American Propertarians are indeed anti-liberal but they are still under the ideological, normative and linguistic sway of liberalism (as were many classical economists). Nonetheless propertarian and strictly customary legalism are completely at odds with liberalism; natural rights libertarians are an odd mix of strongly liberal elements which they are basically unwilling to acknowledge as contrary to their consequential expectations about social order.
Burke’s ‘Vindication of Natural Society’ and ‘Reflections on the Revolution in France’ are both excellent, and there isn’t as much distance between them as is generally supposed. Earlier Burke was more under sway of the radicals, as he grew older he came to reject radicalism though he still supported the same basic ideas of property, presumption of liberty (in a special sense, see de Jasay) and customary authority.