Why I Object to Austrian Economics

Economics Economics Questions
1

Anonymous asked me this in another sub-forum:

Here’s my answer:

[list][*]Lack of regard for scientific method (using Praxeology as a theoretical framework and objecting to Positivism, while using the empirical method in practice, misunderstanding the distinction between mainstream science and logical positivism)

[*]In particular, Praxeology rejects the social sciences, it ignores psychological and sociological impacts on human behavior with poor justification, and relies on far more assumptions than merely “Humans act.”

[*]In practice, Praxeology tends to be used to ignore blatant physical evidence, not merely as an objection to abstract empirical proofs, like statistical analysis of economic behavior

[*]A cult-like worship of Mises and Rothbard, much like what Rothbard accused Ayn Rand of over the “Rand Collective” but running the “Mises Institute” along with Mises’ late wife

[*]Skewing economic history so as to give Austrian economics more credit than it deserves (diminishing the role of Neoclassical economics, misinterpreting Neoclassical concepts to conflate the contributions of Austrian economics)

[*]Spreading their ideas through the use of propaganda to non-economists rather than attempting to get published in academic journals

[*]Generally poor scholarship, since much of their papers are redundantly critical of Keynesianism, redundantly self-congratulatory (hubristic), and sloppy usage of citations

[*]A misunderstanding of and general unwillingness to investigate mainstream concepts

[*]In particular – and Friedman would agree with me on this – its monetary theory should be regarded as crankery and seems to be supported by conspiracy theorism (the Jewish Bankers, the Illuminati Bankers, and the New World Order)

[*]The above, all seemingly intended to support Market Anarchism, which Austrians accept based on axiom. While Austrian economics is strictly a school of economics, it is used to support an entire worldview.[/list]

Much of this has been covered by Bryan Caplan, Justin Raimondo, Milton Friedman, David Friedman, Robert Nozick and others who are Libertarians themselves and don’t have a particularly pro-government bias.

It’s been over a century since it was first said that expanding the money supply would cause widespread depression and monetary collapse. On the contrary, recessions have been regular, not particularly tied to monetary decisions, prices have been stable, the economy prosperous, and the Federal Reserve trustworthy. It was this reason that Greenspan said in the 50’s we should have a gold standard but acknowledges the benefits of fiat today.

The failure of the predictions of Austrian economics to materialize – like the failure of Marx’s predictions about Capitalism to materialize – have driven them out of the mainstream and towards political extremism, even though in their roots, the historical Austrian school contributed substantially to economic theory.

2

“prices have been stable”…

Say what?!

Your posting is detailed and erudite, but I can’t help but wonder what planet you live on if you really think prices have been “stable” since the advent of the Fed.

3

We haven’t had another Depression. On average, we’ve had rates of inflation of just a few percent a year. That’s “stable,” certainly better than the banking crises we faced before fiat.

4

All of your bullet points would be fine except for two problems:

  1. They suffer from a presuppositional bias: to disagree with the Austrians on their research direction away from mainstream economics as a critique by itself, for example, is meaningles because of the presuppositional gap between Austrian economics and mainstream economics! That critique is absurd.

  2. You continually make assertions such as “Austrians make sloppy use of citations”. Yet you cite no instances of such.

Your assertion that recessions are not tied to monetary decisions also lacks support, whereas if you like I will go find the statistics supporting monetary decisions preceding to and subsequent with recessions, just like I have been for the past week on Facebook debates.

While I am unsure about prior Austrian predictions, I am familiar with the Austrian prediction of a massive mortgage bust over the last few years, which has occured. I read about it from three years ago to the current day all the time with writers like the Mogambo Guru. Austrians predicted the credit problems of the banks would lead to problems. They lead to problems. We are not seeing the end of the problems yet.

A lot of your assertions are in blatant contradiction of fact. I have to wonder whether you’re serious or if you’re a troll.

5

I agree with your idea of stability - the stable theft of American savings. Also, your faith in the CPI is absurd. For example, the CPI includes rent but not housing costs. The inflation in housing over the last few years did not touch CPI! But now during the recession rent demand will rise, it will not rise as much as the housing bubble, but the BLS will report the situation like nothing! Not to mention that nobody looks at inflation including food and energy, even though the inflation of those is what is the most important thing evar, which is not nearly as 2%-stable as you like! You have got to be a troll going on like this.

6

The Great Depression of 1929-33 was the result of central banking. The Federal Reserve Act was enacted in 1913. What is a “lender of last resort” that can lend regardless whether it had gold or not? It’s the very definition of fiat money. The FED as created in 1913 was a fiat money machine; if it had to be constrained by its gold reserves, it wouldn’t be able to function as a lender of last resort come fire or high water. It is the very existence of this “put option” that induced banks to lend more aggressively in the 1920’s than they were able to do previously. That’s the root cause of the Great Depression. Recessions are always about cleansing prior capital misallocations. The introduction of central banking just made capital misallocation far more widespread than it had to be.

That’s certainly not correct. You are ignoring the massive asset inflations that have been taking place, from junk bonds, to stocks, to real estate. Manufactured goods inflation been kept low largely because of manufacturing going overseas and technological advance. Normally technological advance and trade should bring price down. Look at the goods and services that have to be produced in this country: healthcare and education, they have been going up at a very high price inflation rate. That’s what would have happened to all prices if we did not have imports to keep price down. That’s why manufacturing is disappearing in this country.

The banking crises of the 19th century were largely the result of fiat central banking. The current FED is not the first attempt at fiat money. The Greenbacks of the Civil War era produced run-away inflation and its eventual withdrawal resulted in massive contraction; before that, there was the Bank of United States doing the same kind of mischief to the economy. Even before the 19th century, the fiat Continental Dollar issued during the 13-state secession from the British Empire eventually led to such a massive boom and bust cycle that Shays Rebellion resulted, and the Article of Confederation was sacrificed to give rise to the Constitution.

The fundamental issue is that fiat central banking transfers wealth from savers to gamblers. The gamblers being the financial institutions that win big during the boom cycle, and get bailed out by the central bank during the bust cycle at the expense of the savers. Sure the savers can bet in the casino, too, but the central bank does not bail out their wrong bets like it bails out the financial institutions’; and when the savers do bet correctly, their winnings are diluted by the money printed up to rescue the financial insitutions. The result is that a large proportion of the population can no longer save for their own retirement as the fiat central banking system cheat their savings away. They become wards of the state. That’s why confiscation of gold and social security were inroduced back to back . . . just like Federal Reserve Act authorizing the money printing and Internal Revenue Act to artificially create a market demand for Federal Reserve Notes (to pay taxes) were introduced back to back.

7

I was curious about your claims, so I charted the London/New York market prices for gold in dollars and pounds from 1718-2006 for £ and 1791-2006 for $.

It would be even more dramatic, but keep in mind that the Fed made gold hoarding illegal and seized private vaults in 1931, and so censored the consequences of its actions for decades.

The trend is clear. The creation of central banks in the U.S. and U.K. led to rapid and continual devaluation of money, unprecedented under the gold standard.

Source: http://www.measuringworth.com/

I found this interesting regarding the panic of 1907:

“Within a few weeks the panic passed, with only minimal effects on the country. By February 1908, confidence in the economy was restored.”

9

What a joke.

We haven’t had another Depression? You mean since the first Fed created Depression? And what about stagflation?

Do you know why the dollar was severed from gold? It had nothing to with policy, it was because the US government had printed more dollars than it had gold. When countries started cashing in the dollars Nixon had no choice but to declare bankruptcy and severe the dollar.

You’re right, the Fed was invented to end “boom-bust.” Fractional reserve banking is self defeating, credit expansion ends in depression. The Fed was created as a “lender of last resort” so that any contractions in the monetary supply, brought about by consumers rejecting fractional reserve banking and initiating bank runs, could be “papered” over.

You’re incapable of seeing the difference between economic growth and monetary growth. Bigger numbers = better numbers?

10

  • Lack of regard for scientific method (using Praxeology as a theoretical framework and objecting to Positivism, while using the empirical method in practice, misunderstanding the distinction between mainstream science and logical positivism)
    Austrian economists do not disregard the scientific method. Praxeology is the framework, but I have never seen another framework that can compete with Praxeology. You would think that scientific economists would be able to disprove elements of Praxeology, but there is inadequate empirical evidence to disprove any part of current Praxeological theory, and there is no empirical evdence which supports alternate theories better. It is not the responsibility of theorists to disprove their own theory to prove their theory. Theories are just conglomerations of refutable hypotheses. It is the job of scientists to disprove the dominant scientific theory with empirical evidence. With respect to Austrian theories of economics, scientific economists have failed to do this. This failure on the part of economists indicates that Praxeology is a very strong theory indeed.

  • In particular, Praxeology rejects the social sciences, it ignores psychological and sociological impacts on human behavior with poor justification, and relies on far more assumptions than merely “Humans act.”
    Praxeology does not reject social sciences. Just because empirical evidence is not able to disqualify Praxeology does not mean that Praxeology rejects the social sciences. In fact, I would expect the social sciences (including empirical economics) to disqualify Praxeology; but that is not what we see. Where are the psychologists and psychological theories that discount Praxeology?

  • In practice, Praxeology tends to be used to ignore blatant physical evidence, not merely as an objection to abstract empirical proofs, like statistical analysis of economic behavior
    There is no such things as ‘abstract empirical proofs’. Emprical evidence is not proof of anything and it is disingenuous to call anything both empirical and abstraction. What blatant physical evidence does Praxeology ignore?

  • A cult-like worship of Mises and Rothbard, much like what Rothbard accused Ayn Rand of over the “Rand Collective” but running the “Mises Institute” along with Mises’ late wife
    ‘Cult-like worship’ is a condemnation I would expect from a sophist. I don’t think you would say that physicists have a cult-like worship of Einstein.

  • Skewing economic history so as to give Austrian economics more credit than it deserves (diminishing the role of Neoclassical economics, misinterpreting Neoclassical concepts to conflate the contributions of Austrian economics)
    To claim that Austrian economics has more credit than it deserves is to assume that its theories are incorrect. This may be so, but without proof, this point is illogical and ‘begs the question’.

  • Spreading their ideas through the use of propaganda to non-economists rather than attempting to get published in academic journals
    Here is another aspect of your obvious bias. Instead of pointing to any other theory which fits better with the empirical evidence or, alternately, providing empirical evidence the disproves Austrian thought, you call the ideas ‘propaganda’ and claim that economists have not gotten the oportunity to properly dispute the theories because of the populist campaign to promote the ideas. But, even populist ideas have intellectual detractors. Where are they? What proof do they have that counteracts Austrian economic theory?- Generally poor scholarship, since much of their papers are redundantly critical of Keynesianism, redundantly self-congratulatory (hubristic), and sloppy usage of citations

I don’t think that the theories of Austrian economics can be held responsible for ‘sloppy citations’, but it doesn’t seem like a legitiate criticism of Austrian economics can be attributed to the fact that it is redundant, since it redundancy might simply be a functon of its explanatory power and increases the chances that it will be disproved. The more times the Austrian economic academics attack other theories, the more evidence there should be of inconsistent theoretical thought or chances to disprove the theories with empirical evidence, yet you claim that this repeated attack as evidence that it is fallacy. This is obviously an inconsistency in your argument.

  • A misunderstanding of and general unwillingness to investigate mainstream concepts
    Again, this is obiously bias. Why should the proponents of a correct and internally consistent theory attempt to be proponents of other fallacious theories?

  • In particular – and Friedman would agree with me on this – its monetary theory should be regarded as crankery and seems to be supported by conspiracy theorism (the Jewish Bankers, the Illuminati Bankers, and the New World Order)
    I haven’t seen intellectual support for the theories of Austrian economics to be based in conspiracy theorism. Also, calling a theory crankery is pure sophistry.

  • The above, all seemingly intended to support Market Anarchism, which Austrians accept based on axiom. While Austrian economics is strictly a school of economics, it is used to support an entire worldview.
    The fact that a theory accepts axioms is not a logical basis for criticism. All theories are based upon axioms. It would be better for your argument to attack the axioms or to attack the logical progression of the conclusions from the axioms, than to attack the fact that axioms exist. Also, it seems fitting that a social theory as broad as economic theories could lead to the development of a social world view. But where is the empirical evidence that discounts marginal theories of value or subject valuations? Where is the evidence that the theories of supply and demand fail when the good is money?

11

While learning the fundementals of neoclassical economics at my current graduate program and simultaneously pursuing my interest in Austrian economics I’ve had the oppurtunity to analyze the merits of both schools. At the beginning of becoming aware of the Austrian School I was indeed skeptical. Why has such a school remained on the fringes if it is indeed so much better than the neoclassical school? Like you, I regarded the whole discipline as being cult like, but as I delved deeper into the work of Mises, Hayek, etc. it became increasingly clear that the Austrian school actually did have some valid points.

One error I made in my initial judgement with regard to Austrian economics was to mistakenly assume that the mere fact that it was not adhered to by the mainstream was evidence of its invalidity. This was a mistake, especially with regard to economics since it is so intimately tied to politics and thus the state. Because of this intimate relationship the discipline of economics has experienced incredible difficulty in it’s ability to produce near universal agreement in its particular laws (in contrast to say…physics). Becase this has hindered its progress so markedly it is no wonder that many consider it a rather unimportant discipline. The theories produced by Keynes had already been debated and refuted in the 19th and early 20th century. How could such theories suddenly make a comeback?

I don’t really understand the criticism that Praxeology rejects sociology and psychology. That would be synonymous to saying that mathematics rejects sociology and thus it cannot be valid. It simply doesn’t make sense. Now it is true, Praxeology does not incorporate these disciplines but that’s becuase praxeology itself is a discipline. It is dinstinct from such disciplines. It is indeed interesting to combine sociology and psychology with praxeology to perhaps come up with a more comprehensive and sophisticated hypothesis but you would no longer be able to derive fundamental laws. This is all incredibly clear in Mises work which you have most obviously not understood.

I have read all of Caplan’s criticisms as well as many of the others and like you, were initially convinced of all them. But once again, as I contrasted the arguments of the Austrian side to the arguments of the others, it was quite clear who was victorious. To list every neoclassical argument and every Austrian argument would be incredibly laborious but I will point you to what I think is perhaps the best elucidation of Austrian and Neoclassical differences(http://media.mises.org/mp3/MU2007/12-Murphy.mp3). Robert Murphy does an incredible job of accurately portraying neoclassical economics (he himself was educated in it) and while doing so he contrasts its methods to the methods of the Austrian School. What struck me about someone like Caplan was that while he clearly possessed the intellect to retain the general principles of Austrian economics he did not really understand the insights implicit in its methods nor the true reasons why the Austrian school has rejected the general methods of the neoclassical school. Caplan, like many, seems to have been swept away by the perceived superiority and magically validating properties of mathematical economics.

For some reason many consider it shameful or insufficient to use the methods developed by Menger and Mises. They do not consider it truly scientific. Many individuals, because of this perception, have erroneously tried to use mathematics as the method for which their discipline is based on. Such was the case of Walras. The problem with using mathematics as the methodology for economics is that it’s simply incapable of capturing the fantastic complexity of the market. Further, it’s simply not necessary. We can already derive the fundamental laws of human action without making unrealistic assumptions. Friedman’s defense of such assumptions is adequate but it misses the point. Sure, we may be able to develop a model capable of making fairly accurate predictions but what does it tell us about the causational forces which govern the precise changes its predicting? Nothing. It’s hypotheses are terribly empty. It may be a somewhat practicial method that firms could utilize in order to make better decisions but it is this the essence of economics? I sure hope not. I constantly found myself wondering how the hell many of the neoclassical concepts related to real life instances. Upon my discover of Austrian economics I suddenly realized that neoclassical economics isn’t really economics at all.

The use of statistical methods in order to validate proposed economic hypotheses is a method which is incredibly difficult to use when applied to the complex phenomonen of human interaction and exchange. I have developed numerous models and am very educated in econometrics and as a result have witnessed first hand the incredible impreciseness of the results produced. Further, the ease with which these results can be manipulated is an incredibly dangerous tool when placed into to the hands of any scientist no matter how objective he may be. What most often occurs is that the economist has a particular agenda and in order to support that agenda he simply uses a program like e-views to produce results which concurr with that agenda; it’s incredibly simple and can be defended against relatively easy as long as one is sufficiently educated in the econometric technical knowledge.

Praxeology does not blatantly ignore physical evidence. In fact it would be more accurate to say that mainstream economics will sometimes blatantly ignore a priori economic laws. You must understand that physical evidence cannot contradict those theories soundly derived via praxeology. In reality it is often the case that the physical evidence which is cited as contradicting a certain law has been either manipulated or grossly misinterpreted. If you truly understood the laws developed by Mises and the like you would understand this point.

It has never been my understanding that the Austrians predicted a complete collapse or apocalypse as result of interest-rate manipulation. They did however theorize that a liquidation process has to occur as a result of misdirected investment in intermediate goods. Further, they do not claim on the basis of their theory to know exactly when this liquidation process will take effect as they cannot know the precise actions of the Fed. They can know however that at some point a liquidation process will set in. As you pointed out, recessions, like interest rate manipulation, have been reoccuring and consistent phenonomenon. I don’t see the contradiction here. Their theory has been confirmed by every recession. Further, the economic prosperity has occured despite the action of the Fed not because of the Fed. I have never encountered an ABCT which posits that economic growth may not take place in the advent of interest rate manipulation. It merely posits that a liquidation process will inevitably occur. In fact, their theory of capital, that of which is overly ignored by mainstreamers, is incredibly accurate in its portrayal of economic growth.

With regard to the point that Austrian’s skew economic history I must fervently disagree. In listening and reading the works of Hayek, Rothbard, Mises, etc. I have been incredibly convinced of their historical accuracy. In fact this aspect of mainstream economics is largely absent. There is an incredible gap and disregard of its history. This however, is merely an opinion but then again so is yours.

In fact such seems the case for all of the reasons (they’re merely impetuous regurgitations) for why you do not perscribe to Austrian economics. Simply saying that Austrain monetary theory should be regarded as crankery and overly paranoid shows incredible ignorance. It’s synonymous to a statist saying that libertarians are cranks with regard to the government and are overly paranoid with respect to the motives of the state. Is this a good reason? The state is the enemy; I doubt you’ll disagree with that. Why is the Fed so different?

Referencing men like Friedman does not suddenly validate your arguments it merely shows your inability to produce rational arguments on your own.

What strikes me about you and many other individuals who persistently regard Austrian economics as cult like is your inability to free yourself from the confines of the present cultural psychology of the populace.

–Austrian economics is wrong becuase it isn’t in the mainstream–

–Austrian economics is wrong because it doesn’t employ “truly” scientific methods–

–Austrian economics is wrong becuase it doesn’t promote the glorious Fed–

These ideas are all merely products of the present culture we live in. I understand this because I approached it the same way. What’s difficult is removing these norms and evaluating something for what it truly is. It’s quite clear that you haven’t done this as evidenced by your ignorant arguments.

Once again I suggest you listen to this (http://media.mises.org/mp3/MU2007/12-Murphy.mp3) as a starting point for objectively evaluating the merits of both schools.

Good luck.

12

Mises has great respect for the scientific method, so I’m really not sure what you are saying.

No it doesn’t; such things are just beyond the scope pf praxeology. Some “Austrians” might reject the rest of the social sciences, but that doesn’t make their opinion the “Austrian” one.

One cannot use statistics or empirical evidence to generate a proof. But in any case, I think you need to step back and look at the real differences in conclusions of Neoclassical and Austrian economics. There really aren’t all that many disagreements.

The cultishness of “lay-Austrians” effects the truthfulness of Austrian positions… how?

Examples?

How, precisely, do you know that Austrian economists aren’t trying to get published in more mainstream journals? And exactly which group of scientists doesn’t spread their ideas to non-scientists using propaganda? Certainly not any other group of economists. Physicists, maybe.

I can’t say I’ve noticed citation usage much, but if you think those sorts of errors are unique to Austrian econ, you haven’t been reading much.

Would you like to bet against my assertion that most Austrians know more about Neoclassical economics than Neoclassical economists know about Austrian economics?

Are you aware how much Friedman agreed with Austrians on monetary theory? He believed heavy inflation would cause business cycles, and wanted to steer towards a rate of inflation that was predictable by the marketplace.

Many sciences are used to support world-views. So what? Economists is uniquely suited to suggesting good political policies.

Maybe you haven’t been paying attention, but monetary manipulations did cause widespread depression and monetary collapse! We called it the “Great Depression”. The economy has been prosperous, although not as prosperous as the era before the Federal Reserve was created (nor are prices as stable as they were then). In any case, I don’t think any Austrian is going to claim that monetary manipulation is the only cause of the business cycle. By the way, if you are going to make assertions about the lack of empirical evidence of the ABCT, you should probably try to refute the papers published which disagree with you.

Unfortunately, we haven’t seen the end of the housing bubble yet, either.

But, about currency… It is true that in America, we haven’t had it as bad with the Fed as other countries have. However, Mises’s arguments were not directed at any specific country. Does anyone know what the average lifespan for a fiat currency is?

13

Commenting on how fiat currencies are a success story according to some, here’s a fun link with a list of hyperinflations through history (most in the 20th century):

http://www.dollardaze.org/blog/?post_id=00107

Really shows how fiat promotes “stable” and “low inflation” economies :slight_smile:

Also in the western world, and in the US in particular, we have never had such high inflation in peace time as we’ve experienced since 1971.

If we use the CPI calculation before it got “adjusted” by Clinton, Greenspan & Co, it shows that we’re running at 4-7.5% for the last few years instead of the 1-4% as the government reports.

14

You’ve done a single year (?) of macroeconomics and now you think you’re qualified to critique Austrian economics, seemingly oblivious that many here have also got an education in it (including myself.) What a joke. I’d respond to you in detail, but it’s been done already. Suffice to say, you presuppose the predominant view of the scientific method is correct (offer no evidence for this), and then say praxeology is ‘wrong’ because it rejects the this so-called ‘scientific method’. What is objected to is not the fact that logical positivism is still popular in the natural sciences - it isn’t, and “Austrians” are aware that it is insufficient even for this much - but rather the fact that almost all advocacy for economics qua empirical science evokes logical positivism. You still have absolutely no understanding of Kantian rationalism or Aristoteleanism (think that one must reject all empirical studies if one is a rationalist - utter nonsense), have no idea why we use this method to develop economic theory.You incorrectly assume it considers the other social sciences worthless (it doesn’t.) You then assume our monetary views are incorrect, offering as your only support accusations of crankishness and Friedman (who, by the way, later changed his mind on gold; and also, whose economics fell apart towards the end of his career.) You accuse Austrians of sloppy scholarship - then prove it. I have read rather widely, both mainstream and “Austrian” journals, and fail to see this at all. Most of the libertarians you mention have criticized Austrianism, and been responded to. It’s not as if their critiques went unnoticed. Your silly accusation of ‘spreading propaganda’ can be reversed and applied to Friedman and Keynes as well, both more energetic than any “Austrian” in getting their views across - not that I consider this bad to begin with; scientists often do this.

So why, exactly, should we be ‘intimidated’ by you?

15

A few years ago I was checking my bank account and doing my usual end of month accountancy when I realized that something was wrong, really wrong.

My bank account gave me a fraction of the interests it gave me in the '80s, not even enough to pay for upkeep and taxes. Moreover I realized that my set budget for groceries and other fixed expenses was buying me less and less each month and why, despite having been a saver for all my life, it seemed that each month I had less money to be put away for the future (…call it capital accumulation if you like) or for my occasional peccadilloes.

I asked a friend with a BA in economics but he was unable (or unwilling) to help, so I turned to that vast source of knowledge that is the Internet. It did help.

I discovered many schools of economics, though I lack the time, knowledge and will to study them all as they deserve, but only the Austrian school seemed to be giving a solid explanation for what was going on under my very nose, or inside my pocketbook, if you prefer.

It has been more than 25 years since the last traces of golden standard were eliminated and if you, like me, has lived through all this you cannot but help to wonder how long we will be able to keep up the current economic trend.

When I turn on the TV (OK, I admit a certain partiality to some shows) and I see hundreds of commercials which seem stress that the only reason to buy the aforementioned product is 0% APR I wonder how long we will be able to go on: many, many persons are living well beyond their means and sooner or later the savers or the Chinese (probably the latter) will get fed up to keep on forking out the bill.

Of course there’s a lot I don’t like about Austrian economics (and they are probably far from perfect) but if you live in the real world and not in some magical faraway land where wealth is simply willed into existence it’s the only way to go.

16

“Lack of regard” because the scientific method of empiricism is inappropriate in the social sciences. Unlike physical objects, human beings aren’t governed by time-invariant universal constants, like gravity or the speed of light, so the scientific method cannot be used. Human beings think; objects don’t. And Austrian Economics does not use empiricism to prove any of its propositions. That’s simply wrong.

Rejects the social sciences? Nonsense. If it ignores pyschological and sociological impacts on human behaviour it does so because these things cannot be predicted with enough certainty. Mainstream economics attempts to answer too many questions, and uses the wrong methodology to do so.

To the praxeologist, your “blatent” physical evidence isn’t quite so blatent! Statistical analysis works well in the realm of the physical sciences, for example, because operating principles generally work the same way on all similar objects regardless of time. (The speed of light isn’t likely to change tomorrow or a million years from now). But things like human attitudes, customs, mores, knowledge etc. change over time, and from person to person, so shoe-horning human action into mathematically precise equations isn’t likely to succeed.

Oh, please! I dare say Keynes had his cultists.

What propoganda? I suppose you mean this website.

So it’s poor scholarship because it criticizes Keynes?

And I guess the mainstream has infinitely more understanding of Austrian Economics and a total willingness to investigate Austrian concepts?

Do you actually know anything about Austrian Economic monetary theory? Have you actually read MES from cover to cover, for example? I don’t see anything remotely connected to crankery or conspiracy theory.

This is a total misrepresentation. You make it sound like Austrianism is nothing more than a political position in search of an economic theory. For those who study and understand Austrian Economics, advocating free markets might become a logical position to adopt, but it’s hardly true to say that its whole raison d’etre is to support such a position.

17

“Lay-Austrians”…good term. I guess I’m one of those, since my formal training in economics is close to nil.

18

I was the “Anonymous” who asked you the question. I don’t know why it put me as anonymous. Anyway, I appreciate you taking the time to answer my question. I will say that I concur with many of the comments posted in reply to your points. I, like many of the others, have studied various schools of thought and I’ve found that Austrian economics is really the only school that accurately uses and applies information.

19

Economics tends to teach that prices should be more accurate than stagnant (stable).

20

Though I wished you used evidence to back up your claims, I must admit that you have very good points, but your conclusion to relegate Austrian economics into a trash-bin with Marxist economics is quite tragic.