Most annoying criticism?

So a lot of times, I hear people say the following: “The Austrians made key insights 100 years ago, but now they’ve gone far off the track and are regarded by serious economists as crazy.” Unfortunately I hear this statement all too often.

One of the things I wonder is: who are these serious economists? The kind working for the government? Paul Krugman?

In fact, when people learn that I consider myself an “Austrian” (technically an Austrian-in-training), or at least hint at it, they say “Oh no, you’re not an Austrian are you?”

Unfortunately the “oh no” isn’t said out of fear of another Austrian intellectual stalwart showing up, but rather out of a “great, another crazy person” feeling.

How does one handle such irritating claims? (This is a largely rhetorical question, but a discussion would be great.)

Nothing major has changed since 100 years ago.

“The Austrians made key insights 100 years ago, but now they’ve gone far off the track and are regarded by serious economists as crazy.”

Sounds like Giles. :stuck_out_tongue:

Is Giles a social-democrat? Because those are the types that keep stating that claim.

Ask him yourself. He’s hayekianxyz.

Yes I know of his name-change. Maybe he’ll wander into this thread? :stuck_out_tongue:

Perhaps.

I don’t think that’s quite fair. I don’t know about Giles political views (a Hayekian social democrat seems rather unlikely, but I suppose there’s stranger..), but he doesn’t seem opposed to Austrian economics. Rather, he is a supporter of the Boettke wing of the Austrian school, rather than the Rothbardian wing.

I don’t think there should be any wings of the Austrian school. An idea is either correct or its not. Don’t be dogmatic. Take the best of all worlds. Its counter productive to divide AE into camps. I don’t think Boettke or Kirzner or Lachmann (well, Lachmann before he went Keynesian) is a different wing. They just study entrepreneurship exclusively, thats all.

I like early Rothbard and late Rothbard, but middle Rothbard went off from writing technical stuff like Man, Economy, and State (which is top notch for several proofs that I like) to writing about ethics and politics. Think of what he could have added, given his technical skill, if only he just concentrated on expanding the economic component of AE after he finished MES! He could have written another two or three such works at least…

I like Hayek , but if this or that essay strikes me as useless or erroneous, I just ignore it. He has quite a few, because he tried several times to use different terminologies to attract understanding in American mainstream. For instance, rate of profit is such a pointless and misleading term to borrow as Rothbard pointed out. That ruined totally Hayek’s 1939 collection of essays. However, Hayek has a great many contributions to AE; even more than Rothbard simply because Hayek has such large technical body of work.

I like anything by Mises.

I think that Boetkke (and the like) and the traditional Austrians (Mises, Hayek, Bohm-Bawerk) ask different questions and investigate different phenomena, but employ the same general premises. The former studies observable phenomena dealing with organizations and institutions. They are essentially institutional economists. The latter studied markets, that is, broad/objective and relatively unobservable phenomena. They were interested in capital, value, monetary theory (ect) and how human actions (praxeology) effects market forces. I think Boettke takes praxeology and focuses on other social institutions, which are intrinsically different in nature. I would say that Boetkke is not a theoretician; he’s into applied political economy (which resembles sociology more than anything else really).

The mainstream basically considers the controversies of the 20s and 30s to be settled, and some Austrians (though I wouldn’t really call them Austrians) believe that the mainstream has absorbed a significant amount of Austrian insights. So the theoretical framework is essentially established and now economists want to actually use what they’ve learned.

What you’ve described is merely someone describing how they fall for the fallacy of appeal to authority.

Your job is to ask that person which claims he believes are crazy and why. In all likelihood, you will be presented with a straw man, which is then your que to create a learning moment.

This is a fallacy because the truth or falsity of the claim is not necessarily related to the personal qualities of the claimant, and because the premises can be true, and the conclusion false (an authoritative claim can turn out to be false). It is also known as argumentum ad verecundiam (Latin: argument to respect) or ipse dixit (Latin: he himself said it). [1]

On the other hand, arguments from authority are an important part of informal logic. Since we cannot have expert knowledge of many subjects, we often rely on the judgments of those who do. There is no fallacy involved in simply arguing that the assertion made by an authority is true. The fallacy only arises when it is claimed or implied that the authority is infallible in principle and can hence be exempted from criticism.

http://en.wikipedia.org/wiki/Appeal_to_authority

He’s a troll.

Yes I know of his name-change. Maybe he’ll wander into this thread? :stuck_out_tongue:

He might do.

He’s a troll.

Oh OK; well that settles it then. For all third parties please take note of this and discount any weight you might otherwise put on my posts accordingly.

I don’t think that’s quite fair. I don’t know about Giles political views (a Hayekian social democrat seems rather unlikely, but I suppose there’s stranger..), but he doesn’t seem opposed to Austrian economics. Rather, he is a supporter of the Boettke wing of the Austrian school, rather than the Rothbardian wing.

There’s a lot of heterogeneity in the “Austrian school”, so much so that labels can be really deceptive. I didn’t fully realise the differences until my own views drifted quite a bit from the Rothbard/ LvMI approach and Austrian economics in general. Regarding my (trollish) views, let me try and make myself clear. To be somewhat original, there is good economics and bad economics, the former helps us understand the real world and social phenomena, the latter doesn’t and often obfuscates the truth. Let me also say I don’t think that there is any single way to do economic research, different tools are suited to different phenomena and we can’t tell a priori which tools will be best suited for the task. Austrian economics is just one approach that has its own comparative advantages, but I don’t think it’s the only valid approach, nor do I think that it’s as opposed to other approaches as a lot of people here seem to think it is.

Let me give a brief example, experimental economics and others have shown that under certain conditions (repeated interactions, situations where mistakes are costly) the standard supply and demand model fits fairly well. Within a few iterations the actors within a “market” will converge on the equilibrium solution.

So, perhaps for these cases the standard mathematical models will do a fairly job good of explaining what goes on “out there”. For others, they need to be modified, even if this involves developing more complicated mathematical tools (or relying on verbal reasoning). The fact is, we can’t tell a priori what tools we should use, and humans can be very inventive with math. Various insights of behavioural economics have been formally modelled and the result is a more complete depiction of real actors in the real world. Moreover, as Nicolai Foss points out in his paper, evolutionary game theory and other game theoretic tools have allowed for the representation of of various Austrian (Hayekian) features of the economy such as emergent order. And these tools have been used in applied work by self described Austrian such as Leeson.

Most mainstream economists say that math is just the language of economics, I think this is true to an extent and it captures an important insight. I’ll grant that sometimes the methodology drives the research, and this is unfortunate, but if Austrians can develop the mathematical tools (as some have done) to model their insights, all the better for them, and it’ll pay off in the long term.

As for my political views, well, who knows? I certainly don’t. Kind of keen on the whole democracy business though.

I think that Boetkke (and the like) and the traditional Austrians (Mises, Hayek, Bohm-Bawerk) ask different questions and investigate different phenomena, but employ the same general premises. The former studies observable phenomena dealing with organizations and institutions. They are essentially institutional economists. The latter studied markets, that is, broad/objective and relatively unobservable phenomena. They were interested in capital, value, monetary theory (ect) and how human actions (praxeology) effects market forces. I think Boettke takes praxeology and focuses on other social institutions, which are intrinsically different in nature. I would say that Boetkke is not a theoretician; he’s into applied political economy (which resembles sociology more than anything else really).

Wait, what? Hayek didn’t study observable phenomena dealing with organizations and institutions? Hayek didn’t work in the economics department at Chicago, he was in the Committee on Social Thought, furthermore, what about “The Fatal Conceit”, “Constitution of Liberty” and “Law, Legislation of Liberty”? Even Mises wrote “Socialism” and other works on political economy.

I’m not really sure it what sense it’s sociology, I’d grant that it’s interdisciplinary, but it borders on legal and political theory, not sociology (not that there aren’t Austrian scholars who do work on the border of sociology and economics, see Storr and the blog "The Sociological Imagination). And why shouldn’t Austrians do political economy? In terms of comparative advantage, I’d say that’s exactly where their advantages lie.

As for Boettke and all not being theoreticians, I’m sure they would agree. In fact, I’ve heard many commentaters on the Coordination Problem blog explicitly stating that to be the case. But using the usual definition of theoreticians very few Austrians are (even the LvMI folk) and to the extent that there are, there are still too many and I’ve not seen all too many breakthroughs from them.

The mainstream basically considers the controversies of the 20s and 30s to be settled, and some Austrians (though I wouldn’t really call them Austrians) believe that the mainstream has absorbed a significant amount of Austrian insights. So the theoretical framework is essentially established and now economists want to actually use what they’ve learned.

If you really deny that a lot of Austrian economics has been incorporated into the mainstream, I’m not sure what to say. Hayek has had huge influences on experimental economics, NIE, economics of information, public choice and ACE. Game theory, which makes up most of modern day micro, was initially developed by Oskar Morgenstern, an Austrian economist.

There’s a lot of heterogeneity in the “Austrian school”, so much so that labels can be really deceptive. I didn’t fully realise the differences until my own views drifted quite a bit from the Rothbard/ LvMI approach and Austrian economics in general. Regarding my (trollish) views, let me try and make myself clear. To be somewhat original, there is good economics and bad economics, the former helps us understand the real world and social phenomena, the latter doesn’t and often obfuscates the truth. Let me also say I don’t think that there is any single way to do economic research, different tools are suited to different phenomena and we can’t tell a priori which tools will be best suited for the task. Austrian economics is just one approach that has its own comparative advantages, but I don’t think it’s the only valid approach, nor do I think that it’s as opposed to other approaches as a lot of people here seem to think it is.

Let me give a brief example, experimental economics and others have shown that under certain conditions (repeated interactions, situations where mistakes are costly) the standard supply and demand model fits fairly well. Within a few iterations the actors within a “market” will converge on the equilibrium solution.

So, perhaps for these cases the standard mathematical models will do a fairly job good of explaining what goes on “out there”. For others, they need to be modified, even if this involves developing more complicated mathematical tools (or relying on verbal reasoning). The fact is, we can’t tell a priori what tools we should use, and humans can be very inventive with math. Various insights of behavioural economics have been formally modelled and the result is a more complete depiction of real actors in the real world. Moreover, as Nicolai Foss points out in his paper, evolutionary game theory and other game theoretic tools have allowed for the representation of of various Austrian (Hayekian) features of the economy such as emergent order. And these tools have been used in applied work by self described Austrian such as Leeson.

Most mainstream economists say that math is just the language of economics, I think this is true to an extent and it captures an important insight. I’ll grant that sometimes the methodology drives the research, and this is unfortunate, but if Austrians can develop the mathematical tools (as some have done) to model their insights, all the better for them, and it’ll pay off in the long term.

So I’m just gonna ignore all that and say you’re wrong.

Hey, at least you’re honest!

As for my political views, well, who knows? I certainly don’t. Kind of keen on the whole democracy business though.

But in all seriousness, doesn’t that create a massive public good problem, namely people researching and being informed about who they are voting for, their past records, and the actual correct policies which should be in place? Note I’m not using the moral argument, but one of Powell’s arguments.

What about you?

You make nonsensical comments, such as:

and when you’re challenged on it:

Then you bail out because you really have no idea what you are talking about.

I’m still wondering if he knows what ‘axiom’ or ‘aprior’ means. Last I heard he actually told me I’ll be waiting for the answer, which is his MO.

How does one handle such irritating claims?

I’ve come across this attitude. My response is to point to the predictive power of Austrian economics historically. Science is useless without the ability to predict, and the Austrian School predicted the Great Depression, the failings of the Phillips curve (tradeoff between unemployment and inflation) and the possibility of inflationary recession, S&L meltdown, tech-stock bubble burst, and the current crisis. Then I ask what kind of track record neoclassical or Keynesian economists have, and which ones predicted the current crisis along with Austrians such as Peter Schiff, Mark Thornton, etc…

Of all stupid things you choose the stupidest.