That implies the world is currently at a pareto-optimal state, which seems a bit of a stretch.
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What's wrong with Austrian Economics???
- Thread starter jueco2005
- Start date
That implies the world is currently at a pareto-optimal state, which seems a bit of a stretch.
Quote from Ghost of Cutten:
Economics doesn't make normative judgements. School A may say "if you don't save the banks X will happen; if you do save the banks Y will happen". That is simply an empirical statement, it isn't political or social in any way.
So if people have a problem with the harsh consequences of Austrian economics implemented then who exactly is bringing political and social arguments to the table?
Is it the theory or people's interpretation?
I'll say it again, and (I'll be ignored again.)Quote from Random.Capital:
You look at what life was like for the median American the year before the (current) Fed was established, and you look at the life of the median American today, and the only reasonable conclusion is that either 100 years of Fed policy is essentially irrelevant, or FRL is the greatest thing since...well, ever.
Money is an abstraction. Without a tangible real world, it is nothing.
The past 100 years of the federal reserve and fractional reserve lending was possible because we had essentially a free source of energy and a booming population. Keep in mind, that one barrel of oil contains the equivalent energy of 23,000 man hours of labor. 23,000 hours of human labor! Think of that in terms of agriculture, transportation infrastructure, etc... it was enormous. Yet somehow, up until post WWII, many people worked in coal mines and factories for 12+ hours a day.
Our entire debt based system relies on essentially free energy in order to grow.
It is no coincidence that fractional reserve lending and central banking grew in lockstep with Oil's use.
So ask yourself, did Central Banking change man's situation? Or was it oil, and Central Banking was merely created to make sure the population did not evenly enjoy the fruits of that incredible energy source? Remember, The Fed was created at the same time as the Income Tax was.
Misthos, this internet hit Crash course makes the same argument as you. I'm sure you have watched it right?
http://www.chrismartenson.com/
http://www.chrismartenson.com/
Quote from Debaser82:
Misthos, this internet hit Crash course makes the same argument as you. I'm sure you have watched it right?
http://www.chrismartenson.com/
Yes I have.
I have also read Colin Campbell, and Richard Heinberg and others.
But here's the thing: people will prefer to become eggheads and look at the nuances of different monetary systems before looking at the 800 lb gorilla in the room - what really changed humanity in the last 100-150 years. We are Petroleum Man, yet we do not recognize it. In another 100 years, humanity will better understand the label "Petroleum Man." That's how things go, you know? In hindsight.
Quote from Misthos:
Our entire debt based system relies on essentially free energy in order to grow.
It is no coincidence that fractional reserve lending and central banking grew in lockstep with Oil's use.
IMO there is much to support such a viewpoint.
The next 20-50 years will be interesting, indeed.
Quote from buzzy2:
Lobbies, corruption and campaign ads couldn't exist without a government, and hence, in an anarchist system.
Not saying Austrians are anarchists, but do you realize the obvious contradiction in what you're saying??
As a matter of fact all kind of corruption get worse the more powerful is the government, and the corrupts spend more time and more money to get their hands on the resources stolen from the people by the government.
Not all power is within the government, PR firms for example try to influence public opinion. Money buys their services. The media does the same thing, money buys their services too. Or what about paying a power plant to cut power to a competitor, why not? A non-government solution that only money can enable!
Corruption can exist outside of government..
Quote from Debaser82:
So if people have a problem with the harsh consequences of Austrian economics implemented then who exactly is bringing political and social arguments to the table?
Is it the theory or people's interpretation?
Austrian economics is only implemented if the government desires its predicted results - that's a political decision.
Basically, theory X (whether Austrian economics, Keynesian, neo-classical, marxism or whatever) predicts if you do A, then B will happen. That is a claim about the workings of reality. For example, physics says if you build an atom bomb and detonate it, you'll get a huge explosion.
Whether you decide to implement it or not depends entirely on how you feel about A and B - that's just personal preference, and depends on your politics, moral views etc. Two physicists might have identical views on whether an atom bomb will explode as predicted, but one may support that usage and another may thing it should never be put into use.
So the claims of a theory (whether a scientific theory, or a sociological one) are determined to be true or false by reality. The desirability of a theory being implemented is determined for each individual by their moral and political preferences. It's important to remember these two things are separate.
Austrian economics predicts that mostly leaving the market alone will result in greater long-run economic prosperity than significant government intervention, yet this implies greater social inequality (due to no welfare spending) and potentially harsher periodic recessions. There are two questions then - firstly, are its predictions true? Secondly, if true, are the consequences desirable and acceptable? It's quite possible for the theory to be entirely true but to be rejected because its consequences or methods are considered intolerable. Equally it could be very desirable whilst being false. Ditto for Keynesian economics and every other school of thought.