What's wrong with Austrian Economics???

[sjfan]

four semesters of calculus... well, then - you clearly have the sufficiently knowledge base to judge... you may want to look up the difference between a sufficient and a necessary precondition.

it's easy enough to point out the "problems" of mainstream economics. Hell, mainstream economists have published various critiques of their own theories and the theories of their peers (see Roll's Critique).

But what does Austrian Economics offer? Nothing. Just a bunch of untestable "principles" and intuitive stories. Oh yes - and common sense (otherwise known as a collection of prejudice collected by the age of 18).

Quote from MKTrader:

Well, I passed all four semesters of Calculus with no problem and went considerably further in my math studies. I also looked at mainstream economic journals (including articles my profs wrote) and almost immediately saw the problems with applying such "rigour" to something more akin to an ecosystem than a car engine.

Ben Bernanke is an academic economist par excellence. Care to see a track record of the predictions from his mouth and high-falutin' models?

 

[MKTrader]

Quote from sjfan:

four semesters of calculus... well, then - you clearly have the sufficiently knowledge base to judge... you may want to look up the difference between a sufficient and a necessary precondition.

it's easy enough to point out the "problems" of mainstream economics. Hell, mainstream economists have published various critiques of their own theories and the theories of their peers (see Roll's Critique).

But what does Austrian Economics offer? Nothing. Just a bunch of untestable "principles" and intuitive stories. Oh yes - and common sense (otherwise known as a collection of prejudice collected by the age of 18).

I only brought calculus up because another poster claimed Austrian economic types "can't pass calculus." His supposition was anecdotal but typical of mainstream/academic types, who make logical fallacies just as often as they bring up their overhyped credentials.

And if reading the likes of von Mises is equivalent to 18 y.o.'s common sense, I have to wonder what 18-year olds you hang around (maybe I shouldn't ask).

 

[sjfan]

REally? (I don't know about him), but almost all the mainstream economists I met when I did my phd were quite open and willing to discuss the short comings the our dismal science.

The critiques are there. They are well known. But they are often not the "popular" critiques that people throw around internet forums. And austrian economics doesn't address any of it.

Btw, you will find plenty of sympathy for the austrian school within mainstream. Except no one can do much with it - because it's not much of a theory

Quote from MKTrader:

I only brought calculus up because another poster claimed Austrian economic types "can't pass calculus." His supposition was anecdotal but typical of mainstream/academic types, who make logical fallacies just as often as they bring up their overhyped credentials.

 

[buzzy2]

sjfan is like any ignorant arrogant mainstream keynesian-monetarist economist.

They are so arrogant and full of it they have expropriated the labels of "science" and "falsifiable" without really deserving either.

First of all, mathematics is not science and it's not science just because you use math. As a matter of fact most economists are mediocre mathematicians who hide themselves under reams of equations thinking noone is going to go through all that garbage and everyone is just going to believe anything they say just because they use arcane equations. They think they are geniuses and everyone else is stupid. But if you go through their books and articles you realize they are pathetic mathematicians and they are also talking through their butt.

The authorithy on what's science and what's falsifiable is Karl Popper who says that science is whatever is falsifiable. Note that Popper does not include mathematics in his definition of "scientific".

Mainstream economists are champions at proposing non-falsifiable mathematical theories. Think about market-efficiency theory, liquidity traps, real business cycles, and the like.

Popper also says that scientific hypothesis are tested (and falsified) through their predictions. Using Karl Popper's standard it's obvious that Austrian Theory is a much better scientific theory because its predictions are much much better.

Economists cannot predict squat due to the fact their theories are not scientific at all.

EDIT: sjfan a PhD. Ok that explains it all.

 

[sjfan]

I guess it's easy to argue your point when you completely ignore the huge volume of literature that empirically tests all those theories you so disdain - and also completely ignore the fact that not all economists agree with those theories and have worked for the last 20 years showing those theories are false (see Roll, Fama, etc).

What's with you? Did an economist beat you up for your lunch money or something?

Quote from buzzy2:

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[buzzy2]

Quote from sjfan:

What's with you? Did an economist beat you up for your lunch money or something?

As a matter of fact, yes, economists are stealing my money and giving it to Wall St bankers, specially those working at the Fed and the Treasury.

 

[buzzy2]

Quote from sjfan:

I guess it's easy to argue your point when you completely ignore the huge volume of literature that empirically tests all those theories you so disdain

sjfan hasn't realized in his years of PhD studies that an economist "empirical test" is not the same thing as "scientific test" in the sense of Karl Popper. An economist "empirical test" is really a "data fitting test", while a real "scientific test" is a test for a theory's ability to predict out of sample.

 

[Debaser82]

I love Austrian economics. Gold going to 10k!

 

[MKTrader]

Quote from sjfan:

REally? (I don't know about him), but almost all the mainstream economists I met when I did my phd were quite open and willing to discuss the short comings the our dismal science.

The critiques are there. They are well known. But they are often not the "popular" critiques that people throw around internet forums. And austrian economics doesn't address any of it.

Btw, you will find plenty of sympathy for the austrian school within mainstream. Except no one can do much with it - because it's not much of a theory

Austrian economics has plenty of critiques of the mainstream ilk. You haven't heard of von Mises? That's like me saying I don't know who Keynes is and then dismissing mainstream economics in a single paragraph. You don't know their arguments or anything about it. You just know a soundbite summary from a tenured professor who would be threatened if it were ever accepted widely.

 

[Martinghoul]

Quote from Specterx:

It's important to note that the old-style Gold Standard was not consistent with Austrian economics because banks could freely extend credit on reserves that didn't exist (fractional-reserve banking). Given this it's no surprise that the system eventually failed, since eventually somebody would demand more gold than your country had in its vaults.

Actually, if a stringent proscription against fractional-reserve banking is one of the axioms of Austrian economics, as you suggest it is, you don't really need to go any further. There, arguably, seems to be sufficient theoretical AND empirical evidence that modern capitalist societies (i.e. where banks are private, rather than state-owned) cannot function under full-reserve banking regimes.