George Mason vs. Mises Institute

Economics Economics Questions
81

Legally legitimate is meaningless George. It is not legally legitimate to smoke pot. It is not legally legitimate to marry someone of the same sex in some jurisdictions, and in others you can be stoned to death for it.

No offense, but when people start talking about legal and legitimate, I roll my eyes back into my head. It’s legally legitimate for Truman to nuke two cities. The guy with the biggest club decides what is legal and what is legitimate, and good serfs pretend the system is an adequate substitute for morality and conscience. “Legal and legitimate” almost sounds scientific, objective, value free. What rubbish.

I don’t believe you can determine this without abandoning subjectivism. All utilitarian arguments raise the question, “Utility for whom?”

82

Thanks for the post, but it still doesn’t (or maybe does if that is all to it) answer my question. Is all that Selgin classifies as dogmatic due to FRB quarrels, or other issues as well? He mentions that not everyone at the MI is bad, but I just want to know if all his “bad” experiences deal exclusively with FRB related topics.

As for the question you posted on your blog (openess versus Mises-Rothbard), I’d go with openess. I think most Austrians would go with openess and new scientific development, as Rothbard would, but it all depends on how you go about it. Rothbard’s MES was full of references to non-Austrian/Mises works Rothbard applied to his book, and he (like you said) critiqued Mises on a number of issues. But not all developments in science are necessarily “progress”, modern economics has “progressed” in the past 50 years but not in a good way. Opening yourself up to new ideas is a great way to learn things and improve one’s knowledge/theories, but learning other ideas and applying them to theories does not always constitute improvement in a field.

83

Just make sure it’s at a profit, unless you plan to sell at a loss, and make up it in volume.

84

Wow, great catch! The timing is impeccable, as we were just discussing this exact thing in another thread. Selgin’s reply to you seems like a total whoosh. EDIT: Actually not a total woosh, but a partial one. He gets that there is a problem with semantics, but instead of trying to sort out the definitions so that the debate can actually begin, he seems to instead conclude that “semantics” should be avoided (including the sorting out of definitions!). Much more on Selgin’s comment here, because I found it a fascinating specimen (though I may mostly agree with his position).

85

AJ, your post baffles me. I don’t claim that definitions and semantics are irrelevant; and my statement clearly shows that I favor a particular understanding of the meaning of a bank “deposit.” Generally, I think peoiple ougfht to use words to mean what everyone uses them to mean, and not what they believe they ought to mean. The problem is that the 100-percenters think you can make a substantive case for whether FRB should be banned by playing etymological games. Again, read the Yeager piece for a detailed treatment of this point. (I’m sorry it isn’t open source, by the way.)

86

Relax, liberty student: I only meant to say that the debate is about whether FRB involves fraud or theft, or causes cycles or inflation–all claims made by its critics! I used “legally legitimate” for fraud and theft’ “economically desitrable” for cycles and inflation and such. What terms would you use to refer generally to these groups of issues?

87

Ok.

Economically desirable is value laden. Cycles and inflation benefit someone in the short run. The question is, cui bono wrt FRB. Surely you’re not going to argue that FRB is completely neutral.

The terms you substituted for are far superior. The terms you used implied other things you didn’t necessarily mean. That’s why getting terminology right matters, because I want to understand you. You’re obviously a really intelligent guy and an expert on money, I’ve followed most of your presentations and short form work.

And that said, I want to thank you for participating here, even if it seems contentious at times. Unfortunately, the LvMI main scholars (besides Kinsella) tend to ignore this community, and we’re privileged to have you discussing with us on what are fairly high level topics for laymen.

88

liberty:there’s nothing wrong with “value laden” concepts in policy discussions. Of course one must distinguish normative from positive propositions; but the 100-percent versus FRB debate is in fact about both.

89

George, policy (statute) is based in authority, which again is the club. You’re welcome to discuss the latest delusions of Christina Romer or Ben Bernanke, you might find it fascinating and a good use of your time. That’s not the discussion.

There seems to be significant goal post shifting going on. We’re not having a policy discussion when we talk about FRB. We’re trying to nail down terms, and then discuss facts. Who has the club, and what arbitrary rules they make without a market process is completely irrelevant and outside the scope of the discussion, not just here, but probably with the 100%ers at large.

I have to run errands, but I am curious about one thing you didn’t touch. Is FRB neutral?

90

The equating of “policy” with interventionism (which is what I assume you mean by “statute”) is novel in an unhelpful way. So far as I (and I think most people) are concerned, “We should abolish the Fed” is a “policy” recommendation.

As for FRB being “neutral,” do you mean neutral w.r.t prices or neutral in the sense of “non-normative”? If the latter, then of course it depends on the context. The statement “FRB is desirable” is of course predicated on certain values; the statement “Scotland had a FRB” isn’t.

91

I’m not equating policy with anything. I am discussing policy qua policy. Government policy is written in statutes. Statutes are not law.

As far as being unhelpful, I think that’s untrue. I am trying to clarify what is becoming an increasingly abstract and vague discussion. As far as what most people think, I don’t care. A billion fools can’t manufacture a single truth. And I am not calling for the abolishment of the FED so let’s abandon the notion that I have made a single policy recommendation in this discussion, because I have not. I do not have the “power” to make policy, and I recognize the futility of central planning by policy.

The latter. What context? I’m totally unconcerned with your values, although I do like your choice in eyeglasses frames.

92

Statutes are not law.

I guess I do not share definition of at least one of “statute” and “law” with you. Or I am missing a joke.

My understanding of common definition is that statutes are legislation is law.

93

‘I am not angry at MI, and I never said that they dissallowed criticism of Mises and Rothbard. Obviously I’m posting here so that’s not the case. I said that there is a Rothbard (and Mises) personality cult that is not official MI policy but that affects the reasoning of some of the more prominent MI economists, and that it is standing in the way of sound scholarship and setting a bad example for students. I said this was particularly true w.r.t. MI-outlet writings on monetary economics, and I stand by that. Your own comments about banking are good examples of the sort of thinking that this leads to–thinking utterly un-informed by historical inquiry. That of course wasn’t the case with MR himself. But it sure is wrt many of his devoted followers.’

I’m still having difficulty understanding you. You state that criticism of Mises and Rothbard is allowed but think we’re all under a cult of personality? So the MI allows criticism of Rothbard and Mises…but it doesn’t itself criticism them? What is “unsound” about an organization again dedicated to the spreading of the Misesian-Rothbardian tradition not expressly criticizing them every chance they get or when you desire them too? Should each lecture be headed with the warning “Well I like Mises (or Rothbard) but there are many things I don’t like about him such as example X…but this lecture isn’t about example X…I just wanted to point out that I am not a ‘cultist’?”

And what is this nonsense about “My own comments on banking?” I don’t care about banking. I only care about economics in its capacity to explain historical events. I follow history with some minor dabbling in other social sciences which is an obvious necessity for history. Do you perhaps mean the MI’s comments? Well I am not it and it is diverse so it is somewhat of an effrontery to give the label to one individual.

“The ultimate cause of the poor scholarship I refer to is insularity. Read HHH and Hulsman and Block and Bagus and Howden: you will see how little they read or refer to that’s not from from each other and other treu believers; you will see that they refer to other stuff only scornfully and in order to attack it. You will see that they hardly ever publish anything except on the MI cite or the QJAE. They have never really rumbled with other economists, and they never learn a damn thing from those of us who enter their own forums to tell them where they are full of baloney. Instead, the same tired old criticisms just get repeated again and again: Scotland didn’t really have free banking; a “deposit” can only mean a bailment; bank’s multiply property titles; no one would voluntarily put money in an uninsured FRB; 100-percent money “certificates” could circulate just as readily as fractionally-backed ones, etc. etc, etc. All crap; all painstakingly refuted, sometimes in several places; all ever recurring. Yecch. It makes me ill to realize how many people are taken in by this amateurish and silly stuff.”

And what would you have them do? Tell tales of Keynes and his nonexistent Austrian views? These theorists are developing (or redeveloping, or continuing to develop if you wish) the economic theories of the Austrian school. They will naturally cite other Austrian economists because they are developing the same mode of thought. Sometimes they even break this tendency. I know that all the historians at MI at one time cited Gabriel Kolko’s Triumph of Conservatism as a great source of information on the Progressive era and Anti-Trust law. Kolko is a Marxist.

They attack a great deal of things outside their theories because they see a great deal wrong with it and again is the natural course of the development of a school of thought in this case Austrian economic theory. Concerning your point on journals, with the development of internet based journals (which greatly reduces their cost and their ability to be dispersed) and the ability to create one’s own journal why must Austrians try to publish outside of their own? Why are you dead set on going into other spheres and tweaking their noses? In the history community (I know there are differences in economics and history as a discipline) there are multiple journals, thousands even. Some are so esoteric as to be about a year or decade in time. There is the Annales journal, The History of Agriculture, etc. Why are you so fervent in your push toward a concentration of journals? And if you’re not then why are you angry that Austrian scholars mainly write in Austrian journals?

I don’t see how you can connect the idea that they are constantly attacking theories that are not their own yet have “never really rumbled with other economists.” You will have to further explain that to me. Concerning you comments about the “same old tired criticisms,” people usually have them because they feel you are missing something vital and are not recognizing it. If this turns your stomach, the idea that you will have to reiterate your position to others, then you have two options: Steel yourself if you care enough, or give into a defeatist attitude and withdraw from academia. Honestly, I sometimes wonder which to choose. Do you know that Marx’s method of historical materialism which looks at historical events as being the product solely of economic values is still followed today in 2011? I mean a theory that was basically proven inadequate over 130 years ago is still being held up as correct by a group of people. Bad philosophies of history is like the broken window fallacy in economics. It is like knowledge in general. Bad knowledge does not just shimmer away into the night. It sticks around and gets rediscovered. You may think this of those you are discussing but they probably think it of you too.

94

Andrew, I don’t think that anyone who reads the initial passage you quote from me, and then your “gloss” on it, with open eyes will believe you have read the first passage with any reasonable care. Where do I say that “all” MI participants are involved in a personality cult? Were did I say that none of them ever criticize Mises or Rothbard.

As for my claim that insularity marks some MI scholarship, I stick by it. Indeed, your suggestion that HHH and company couldn’t possibly make any positive use of the views of economists beyond their own cadre without having to “tell tales of Keynes and his nonexistent Austrian views” shows that you share that insularity, that is, that you think there’s just two kinds of economics: hard-core MI Austrian and “Keynesian”!

95

As for my claim that insularity marks some MI scholarship

insularity marks some non-MI scholarship.

Some non-MI scholars are also cultish.

Any sufficiently large collection of people will contain people that some people won’t like.

I think these petty issues are beneath discussion. Best stick to scholarly topics.

I’m enjoying rereading The Myth of Free Banking in Scotland by Murray N. Rothbard at the moment, have you read it?

96

This is where I call foul. Nowhere in his post did Andrew claim that there were only two schools of economic thought, Misesian and Keynesian. I am sure that he is well aware, as are most people here, that there are dozens of other schools, from Marxist to monetarist to German historical and so on. This claim of “insularity” is nothing more than ad hominem.

Moreover, I don’t see the problem with Austrian economists citing other Austrian economists. Is it “cultish” for one economist to cite another economist who utilizes the same methology? Isn’t it commonplace for Keynesians to read other Keynesians? Or going out of economists entirely, an evolutionary biologist to read other evolutionary biologists? Are they “cultish” for not sufficiently quoting creationists? So far as I can tell, it is incosequential where you get your ideas from as long as they are correct.

97

"Andrew, I don’t think that anyone who reads the initial passage you quote from me, and then your “gloss” on it, with open eyes will believe you have read the first passage with any reasonable care. Where do I say that “all” MI participants are involved in a personality cult? Were did I say that none of them ever criticize Mises or Rothbard. "

Well you assign many titles to those you are aiming against. You stated what they were doing was akin to theology and not serious scholarship. Perhaps I am seeing the full implications of your writings. You stated that all “Rothbardian monetary theorists” participate in this Catholic-like dogma at the MI. Now I could be wrong about my following statement but isn’t the vast majority of the MI “Rothbardian monetary theorists.” I do understand that there are Misesians and Hayekians but this whole argument seemed to center on Rothbard and to some degree Mises but only in his capacity as a cult of personality. You never did say none of them ever criticized Mises or Rothbard but you seem to be going out of your way to say that they should do it more or at least be gleeful at the opportunity to do it. That is what all this talk of cult of personality means to me. It is the veneration of an individual or individuals to a godlike status. How do you prove someone isn’t a God? Show their faults. So following this line, to get rid of the “cult of personality” you suppose is at the MI, one would have to either increase the criticism ( My lecture note comment see above) or be happier about criticism (My stepping on toes comment on page 3) to counter act the cultist behavior.

"As for my claim that insularity marks some MI scholarship, I stick by it. Indeed, your suggestion that HHH and company couldn’t possibly make any positive use of the views of economists beyond their own cadre without having to “tell tales of Keynes and his nonexistent Austrian views” shows that you share that insularity, that is, that you think there’s just two kinds of economics: hard-core MI Austrian and “Keynesian”! "

How you can be affronted by my supposed glossing over of your comments while you gloss over mine concerning the dispersion of journals is rather bizarre. I never stated that economists at MI can’t find positivity outside their school. They can find a great deal wrong but that doesn’t infer they can’t find something right. In fact I made the example of historians in MI who utilize a Marxist work in order to shed light on Anti-Trust law. My comments were thus: That Austrians should write in Austrian journals. Publication of journals is at a watershed moment with the coming of internet based journals and printed journals are so numerous now that one asks why Austrians should publish in journals that are contradictory to their held views. Can Austrians read other journals? Of course if they so desire. I would not presume to tell them what they are to read and my comments about writing habits are squarely my own. I am no so petty as to think that everyone should read what I read or write where I write…are you?

98

I think what Selgin is trying to say in terms of current Austrians being insular is that they are only have dialogues within the community and you rarely ever see them having one with the rest of the profession. Hayek, Mises, and Rothbard routinely did this and got published into journals. And despite the rise of the internet and how it gives people the ability to access blogs, when it comes to peer reviewed journals , the prestige of the journal does matter within an academic community especially if you want to get your ideas across to other academics(along with having more influence in top schools). Making it more “sellable” to the rest of the public isn’t what academics set out to do(see Bryan Caplan’s Myth of the Rational Voter) nor should it by the foundation for whether or not something is correct.

99

Bob Murphy has called out Paul Krugman to debate and has engaged Brad DeLong. Walter Block has plenty of videos on this site and on the youtube where he debates non-Austrolibertarians. Art Carden blogs for Forbes. DiLorenzo testfied in front Congress recently. Most prominent LvMI scholars are professors within non-Austrolibertarian schools; and I don’t pressume to know whether they engage their collegues at those school.

EDIT: Would I like to see even more engagement with non-Austrolibertarians? Certainly.

100

I’m afraid I’m saying much more than that, pentahedron: I’m saying that they 9that is, the bunch I have in mind) aren’t interested in learning anything from “non-Austrian” economists, and even from what they consider the wrong sort of Austrians. Or rather: they are convinced that non-Austrians have nothing to offer, except to serve as objects of contempt. Again: I speak of monetary economics especially. Salaerno is a good historian of monetary economics, so I don’t count him among the insular ones. But there’s a lot of good non-Austrian monetary economics, and the crowd I have in mind shows no evidence of knowing it. Laidler, Warburton, Friedman, Timberlake, Goodhart, Schwartz, Gorton, Clower, Howitt..the list of excellent monetary economists who aren’t at all “Austrian” is very long, yet for some hard-core Rothbardians the are apparenetly useless, or worse.

Consider a typical specimen–Hulsmann’s article on “Optimal Monetary Policy.”
I chose it because the topic is one that countless economists of many schools have written about, so that one would expect a lot of delving into and drawing upon non-Austrian works even despite the article’s being aimed at an Austrian audience. But check out the biblography: a few works by classical and early neoclassicals, and then two or three refs to contemporary or near contemporary non-Austrians. Look at the text, and you can confirm that the actual use made of the latter is fleeting. Now, it happens that (as you might expect) the article argues the advantages of delfation. So you would at least expect it to mention important works dealing with the specific question of deflation’s optimality. Instead, you get the following footnote: “24It is a revealing fact that there is virtually no literature on deflation in modern economics.” Friedman on the “Optimum Quantity of Money” perhaps the most famous of all contributions on the subject of “Optimal Monetary Policy” in the last 50 years, and one that in fact argues for deflation? No mention of it! Nor of critical responses it inspired. The article also makes claims about the meaning of monetary “laiseez faire,” but doesn’t cite Samuelson and Gramm’s work on this very subject, even to criticize them. And no mention, by the by, even the many articles (and one pamphlet) yours truly wrote and published in relatively prominent places on the “productivity norm.” Yet the reference list is crowded witrth cites to the usual crowd of 100-percenters. Might the author have perhaps improved his understanding of his chosen topic, or the accuracy of his argumernts, by drawing on any of the omitted literature? I don’t doubt that he might have. But even if not, he most certainly would have made the work that much more scholarly.

That is what I mean by insularity.