Indeed, the two should be used in tandem. One keeps a a leash on the other. In the case of today empiricism has gone on a rampant tangent over the past century. Empirical positivists have to constantly change their theorem’s to match their newly derived arbitrary data every few decades.
Loose analogies and sloganeering don’t make for productive discussion. If that’s what you really want to do then be my guest, but I won’t be getting involved. The fact of the matter is that the analogy doesn’t hold, the Bible doesn’t purport to explain bridge construction, and few (no?) Biblical scholars would ever say such a thing. However, many (all?) of statisticians and econometricians believe that there are various econometric tools that can help us understand the real world and do empirical work. I’m not saying that this makes them correct, just that it’s a good reason to actually do the research and stop the knee jerk reaction against econometrics.
Do you understand praxeology? Econometrics and praxeology have fundementally different views on epistomology (in relation to economic knowledge), so does science and the bible. If you accept praxeology you must reject econometrics. It will not provide ANY benefits what so ever, if it does, it does so for the wrong reasons.
Even if one accepts the Rothbardian approach to praxeology, there’s still room for econometrics. The former is, once again according to the interpretation prevalent around here, merely a guide as to how theory should be done. It says nothing about the methods or tools one uses for empirical work.
I’m of the opinion that while econometrics is not useful for developing theory, it is useful for clarifying theory.
How does the [alleged] Rothbardian approach to praxeology differ from the Misesian approach to praxeology, and how does it pertain to econometrics?
There are 2 basic reasons why the Austrian school isn’t more mainstream:
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The ideas and discoveries of it do not benefit the power elite. In fact, it does the opposite.
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Austrian economics goes against a lot of personal prejudices people have, like against foreigners, rich people, people’s direction towards wanting a leader to solve their problems for them, people wanting something for nothing, so they hope government steps in.
Jonathan M. F. Catalán wrote the following post:
I’m of the opinion that while econometrics is not useful for developing theory, it is useful for clarifying theory.
I dont find it useful for anything but math itself.
Well…any negative aspects about AE???
RogueMerc wrote the following post at Thu, Apr 15 2010 1:46 PM:
There are 2 basic reasons why the Austrian school isn’t more mainstream:
-
The ideas and discoveries of it do not benefit the power elite. In fact, it does the opposite.
-
Austrian economics goes against a lot of personal prejudices people have, like against foreigners, rich people, people’s direction towards wanting a leader to solve their problems for them, people wanting something for nothing, so they hope government steps in.
Austrian economics goes against a lot of personal prejudices people have, like against foreigners, rich people, people’s direction towards wanting a leader to solve their problems for them, people wanting something for nothing, so they hope government steps in.
I can’t really say that I find this explanation to be very convincing. As Bryan Caplan has documented all economics tends to go against the sorts of irrationality and prejudice that humans are predisposed to for evolutionary reasons. To give just one example that you’ve already mentioned the general public tends to hold strong anti-foreign biases that can manifest themselves in numerous ways (one of which is overestimating the amount of GPD that is devoted to foreign aid, another of which is the advocacy of protectionism) whereas economists, mainstream or otherwise, generally understand the increases in productivity associated with the division of labour and expansion of trade.
The ideas and discoveries of it do not benefit the power elite. In fact, it does the opposite.
Once again, I can’t say I find this particularly persuasive. I find the whole idea of a “power elite” to be very dubious, but even disregarding this, if a “power elite” really did exist and were buying off the economics profession, presumably one would expect to see that economists would be more in favour of state intervention in general than intellectuals other “neutral” disciplines. Yet, economists are far more in favour of the market and free trade than other scholars.
I can’t really say that I find this explanation to be very convincing. As Bryan Caplan has documented all economics tends to go against the sorts of irrationality and prejudice that humans are predisposed to for evolutionary reasons. To give just one example that you’ve already mentioned the general public tends to hold strong anti-foreign biases that can manifest themselves in numerous ways (one of which is overestimating the amount of GPD that is devoted to foreign aid, another of which is the advocacy of protectionism) whereas economists, mainstream or otherwise, generally understand the increases in productivity associated with the division of labour and expansion of trade.
This isn’t an example of irrationality, and I don’t think any Austrian would argue that capitalism is 100% efficient. But yes, I agree that the idea that Austrian economics is not accepted because of some conspiracy or something like that is bunk.
I think there is a “power elite,” but I don’t think they are buying off the entire economics profession. I do think however that they are able to considerably effect some individual economists. This is by no means a radical position and it is pretty well accepted in many circles in the sociology and the philosophy of science.
I think part of the reason why AE is not mainstream is due to methodology (which is fair) and the fact that it generally won’t get you as far regarding your career as an economist. The economics profession is not a group of enlightened individuals purely concerned with good/bad economics. It is effected by social factors just like every other science. But this is in fact viewed as a good thing by many people.
Overall though the economics profession is pretty fair and open to discussion relative to other fields in my opinion.
I responded to that here:
The general public believes that due to previous kook economists that promoted it. You make it sound like they believe it from scratch.
They already give the greatest “effort”. Lies only work if the people saying them have some credibility. You can’t just hire pure stooges to say anything and get long term results.
That is saying a lot when sociologists are nearly 100% Marxist… All it means is that you can stretch things only so far. The reason that you get accepted, sorry to say, is not due to politeness. Rudeness is not an excuse for ignorance. It’s due to your propensity for, uh, “flexibility”.
To clarify on Jonathan’s earlier point. There is no such thing as a 100% efficient economy. Such a concept is make believe. I dislike it when people try to use that as an excuse as to why capitalism fails. A 100% effecient economy implies omniscient beings.