Just awesome.
I have a quible. is this a typo or a difference of opinion.?
you include as something that makes no sense (the rest are good to me)
- the fact that inflation does not affect all incomes and prices in the same degree or even in the same direction.
because monetary inflation does not work mechanically to affect all money incomes and money prices, but affects these as a result in changes in actors demand for money therefore money incomes and money prices can be affected in varying degrees and can vary in opposing directions.
This sentence explains a great deal. Since, as Roger Garrison says, Austrian macro is almost synonymous with “capital-based macro”, I don’t know how you can be an effective critic of Austrian economics if you have “little interest” in understanding its underpinnings.
That’s the “Boettke” approach, and it has its merits. But there’s also the LvMI approach, which is to directly reach and inspire brilliant young minds like Esuric. That approach is spreading Austrian economics across the general landscape of ideas like a prairie fire, and it will eventually bear fruits in academia as well, as the "Esuric"s of the world get their PhDs and take the “Keynesians of the chair” by storm.
There are brilliant brilliant Austrian economists who did and do understand Austrian Capital Theory.
So basically your entire case rests on appeal to authority AND numbers. It’s hard to debate who is the more “brilliant authority” but the numbers are indeed on your side. So you win! If I was debating you I would concede and move on.
As Avi Cohen notes in his summary of the Knight/Hayek Capital debate, Hayek himself had little interest in capital theory in and of itself and was only interested in it so far as he believed the structure of capital was related to the business. This secondary interest in capital theory is carried on by Roger Garrison and other advocates of ABCT. I have thoroughly read and tried to understand Garrison’s presentations of ABCT (as well as others), and after doing so I am just not convinced by his arguments. I could be wrong, and I keep hoping to get involved in a debate on ABCT eventually to try and clarify my thoughts, but its not on my list of priorities now (my research interests like well outside Austrian Macro so this is a pass-time for me).
Does this mean I consider myself a critic of Austrian economics? No. And you’re taking a pretty big intellectual leap by trying to divine my opinions on Austrian economics as a whole from that single sentence.
Of course, this thread isn’t about my views of Austrian economics in general or ABCT specifically. Its supposed to be about why ABCT is not accepted by mainstream economists. That is a question separate from whether ABCT is objectively true or not.
Boettke’s approach has resulted in creating economists like Peter Leeson that get appointments at top universities (Univ of Chicago) and edit leading journals (Public Choice). LvMI has been operating for almost 30 years (10 years longer than Boettke has been teaching) and has much greater financial resources than a single professor at a second-tier university. So where are its prodigies publishing and finding positions? [;)]
Look, I am not trying to ruin my Karma by having any sort of heated discussions. 
I just think LvMI’s approach is too populist. If Austrian Economics wants to succeed in the realm of economic science, it needs to convince the man in the department chair not the man on the street. And I feel like that is where too much of LvMI’s resources are directed.
Let me break this down into pieces for easier consumption.
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The OP created a thread asking “why isn’t ABCT more generally accepted”.
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Many people responded to the question by saying mainstream economists are either stupid, lazy, or politically biased.
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I said that I found these arguments unconvincing because they don’t explain why smart Austrians wouldn’t demolish idiot mainstream economists with brilliant counter arguments.
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Esuric responded that Austrians have demolished the mainstream, but they mainstream economists are just ignoring Austrian brilliance. He provided several specific articles to support his point.
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I responded that mainstream economists have indeed been paying attn and they found his examples to be not so devastating. With the Hayek 1936 Mythology of Capital Article, you can find Nobel Prize Winning Economists confronting these arguments again and again and simply not being convinced. No one is ignoring anything. So that can’t possibly explain why Austrian Capital Theory (or ABCT) is not more generally accepted. Now, I never said that the Nobel Prize Winning Economists were right to reject Austrian arguments. Maybe they were wrong. But if they are wrong about Austrian Capital Theory, then its a communication problem that Austrians must be responsible for solving (no one is going to beg you show them why they are wrong). Maybe that isn’t fair, but that is a normative question irrelevant to the point of this thread.
Hope that helps. [H]
http://www.youtube.com/watch?v=zhoFOyy7rbo
Any specific issues with that lecture? I would be very interested in your criticism of it.
do you distinguish between the critics of the ABCT? What do you make of Krugman’s recognition of and dissatisfaction with ABCT?
May I add that while Boettke is doing all of that, he is also the lead blogger of Coordination Problem, which does exactly what Lilburne is stating is the “LVMI approach”.
Lam, Boettke’s focus on that blog is promoting scholars already in academia, and not educating potential future scholars or helping them teach themselves. For example, most of the books he plugs are so expensive, he doesn’t even bother telling his readers to buy them, just to tell their University library to do so.
Is this because you think economists are just so objective by their very nature? Rivalry, envy, prejudice are all human features that are absent from these people?
Their rejection of certain theories can have nothing to do with their previous academic works that they’ve dedicated their entire lives to? Or it can have nothing to do with the social political and intellectual institutions that they are so accusomed to and in many ways so heavily dependent on for their status and careers?
This is quite a naive view to as how intellectual ideas are shaped. There is much much more to just quality of academic work and allegedly objective scrutiny by peers.
It is difficult to get a man to understand something when his job depends on him not understanding it.
DD5,
Well, you can call me naive if you like. But I find the idea that Austrians and Mainstream Economists are speaking different languages as a more plausible explanation than anything offered thus far.
But hey, maybe you’re right. Maybe there is no way a libertarian economist could possibly rise to prominence by attacking the Keynesian mainstream with clear, concise, empirically driven arguments.
So why should Austrians even try?
Giving some examples of this would be far more convincing when providing such an accusation after he had stated that the counter attacks had convinced him.
Your entire argument here is: If this guy or that guy do not accept your argument, then either
- you’re wrong
or
- you’re not communicating
But I don’t buy you argument. Especially regarding #2. I think it’s BS. You would like to prove #1, but you can’t.
Why do I think this? Because you can’t even make the case for #2. There is a vast amount of literature on Capital theory, which you yourself have just said that you are not interestd in. I guess it’s a communication problem.
There have been publications, books, articles, etc… There are even books at all levels to all types of people from back in the days of Henry Hazlitt that attempt to do exactly that - Communicate! Like his “The Failure of the New Economics”.
What is the communication problem? The days of Mises in German are gone! There is not enough differential equations in the Austrian papers?Perhaps, it’s not just equations because one can easily, just for the sake of protocol, add some equations of an electrical circuit or a mechanical spring system, but how the equations are arranged and what they try to covey. In other words, perhaps it the content? yes, that is definitely a serious communication problem.
that the mainstream economists that drink from the teat of government can adopt positions that they perceive to be superior apologetica for fiat money and central banking does not shock me, nor fill me with joy at the prospect of convincing them of a position opposed to both fiat money and central banking.
DD5,
I think I explained myself pretty adequately 2 pages ago. When I say that Austrians and mainstream economsits are spreaking two different languages, I don’t mean German and English. I mean that mainstream economists (for better or worse) demand to see some combination of analytical rigour (yes, that means mathematics) and empirical support (yes, that typically means econometrics).
And Austrians can do this if they want. Look at Peter Leeson, he is no mathematician, but he is willing to couch his theoretical arguments about anarchism in the language of standard game theory:
http://www.peterleeson.com/PSH.pdf
I don’t think Leeson has ever done any full-blown econometric studies (I could be wrong), but he is also primarily an economic historian studying topics where no good datasets exist. So he can get away it. An Austrian Macroeconomist wanting to convince academics that ABCT is true has over 70 years of easily downloadable data from a large array of sources to play with, won’t have it so easy.
And DD5 I am getting a little annoyed with you questioning my intellectual integrity. Saying I am only making this argument because I can’t show that ABCT is false? I wonder what working model you have in your head of how your intellectual opponents operate. “They know ABCT is right, but their evil dark souls won’t let them admit it!!!” You really need to drink more green tea.
So its those evil central bankers? Not only do they control our currency, but they have a strangle hold over academia (despite not having any clear ties at all to the hiring/firing decisions of universities)!!! WHAT MONSTER HAS JEKYLL ISLAND CREATED!!!
[H]
By the way Student, the man in the picture actually weakens your argument about a problem of communication. Despite the differences on capital theory, Friedman also advocated for many of the same things that Austrians have advocated for, yet he had utterly failed not much less then Austrians, despite his more positivist mainstream approach. Not only with respect to the free market economy in general, but even his recommendations for monetary policy have been largely ignored by most mainstream economists, and certainly by policy makers.
Leviathan, students of Mises know empiricism is a hopelessly flawed methodology for economics, and it underlies the fundamental erroneousness of Friedman’s macro. In the long run, lying to ourselves and embracing fallacy would do libertarianism no good whatsoever.