What's wrong with Austrian Economics???

[jueco2005]

Quote from Debaser82:

All schools of economics are politicaly and socialy inspired it is not fair to blame the Austrian one for this alone.

Well...........economics is a social science being always politically abused.

But no other school of economic thought (aside from Marx) gets so involved in a social political order. Mises called his "human action" study "praxeology". He proposes a non government world......otherwise "anarchy".

What Marx is on the left this guys are on the right.

 

[Anaconda]

Quote from Specterx:

When it comes to practical policy measures, different folks will say different things. Some will say fractional-reserve banking is the problem while others would say that any intervention (like, to enforce full-reserve banking) would be immoral and that the real problem is the FDIC, etc.

I would be curious as to what evidence you have to back up this assertion, as I don't see any reason why full-reserve banking couldn't work. For sure, it would be a much different system than what we've got now. In effect, "retail banks" would just be money warehouses (charging a very small fee for the service, held down by competition). Demand deposits would cease to be a source of lending capital and "loan institutions" would need to be funded by some other means - bonds, share offerings, or private capital.

Note that fee-charging "money warehouses" already exist in the form of entities like Goldmoney, though of course these are almost laughably marginal compared to the mainstream banking system (and why not when it's backed by the government?).

It seems like the level of regulation needed to effect these changes would be far, far less complex than all the structures we've currently got in place to control the existing, highly-leveraged banking system.

You're missing the point. The MODERN capitalist system would be crippled by full reserve banking, as it is completely dependent on endless growth of credit.

Most of Wall Street would be gone with full reserve banking.

 

[Misthos]

Economics also ignores the fact that exponential growth in a finite planet is unsustainable. And countries such as Japan may finally realize that as population levels off, a monetary system reliant on exponentially expanding credit may not be the way to go.

Populations leveling off is not a bad thing... it's just that our current monetary system collapses in such a scenario.

I mentioned Biophysical Economics before in another post. Anyone familiar with it? And what's wrong with acknowledging concepts such as the laws of thermodynamics and exponential growth in relation to Economics?

Maybe the Austrian School would make more sense when (if) the global population levels off? Either way, it can't grow forever, it either levels off peacefully as in many European countries and Japan, or, you know, there's a quick "correction." I don't think anyone here is hoping for the "correction" scenario, myself included.

 

[MKTrader]

Quote from jueco2005:

Well...........economics is a social science being always politically abused.

But no other school of economic thought (aside from Marx) gets so involved in a social political order. Mises called his "human action" study "praxeology". He proposes a non government world......otherwise "anarchy".

What Marx is on the left this guys are on the right.

Where did von Mises say that? Minimal government, sure, but I don't think he ever called himself an anarchist. Rothbard was closer to that position.

Like all schools of thought, there are different views within the school. Hayek is on the more mainstream end of the continuum, and even won a well-deserved Nobel prize.

 

[Debaser82]

I like this quote, don't know where it's from.

'Where thou then equilibrium art: between laissez-faire economics and market authoritarianism we find vast wilderness of ineptness and corruption - a wilderness of false ideological pretense from those whom are governed and those whom govern.'

 

[Specterx]

Quote from Anaconda:

You're missing the point. The MODERN capitalist system would be crippled by full reserve banking, as it is completely dependent on endless growth of credit.

Most of Wall Street would be gone with full reserve banking.

So what?

Of course finance would still exist as an industry, but it would be a good deal smaller/less profitable than it is now. Doesn't seem like altogether a bad thing (although it wouldn't be great for trading....).

 

[achilles28]

Quote from Specterx:

So what?

Of course finance would still exist as an industry, but it would be a good deal smaller/less profitable than it is now. Doesn't seem like altogether a bad thing (although it wouldn't be great for trading....).

Yep. Private capital would allocate capital instead of banks and Government.

Interest rates would be market determined.

Are corrupted shills and academics better at pricing risk than the Market? HELL NO.

 

[morganist]

Quote from achilles28:

Yep. Private capital would allocate capital instead of banks and Government.

Interest rates would be market determined.

Are corrupted shills and academics better at pricing risk than the Market? HELL NO.

you cannot have no intervention in relation to aggregate demand.

the interest rate is more than just an aggregate demand mechanism. it maintains the international value of the currency against other countries plus it maintains the value of return and repayment if inflation or deflation occurs you cannot have a free floating interest rate.

 

[SNBthetrue]

Quote from Misthos:

Economics also ignores the fact that exponential growth in a finite planet is unsustainable.

The best Illustration of this concept is the videogames that is Age of Empire IV from Microsoft. You should play a game to see it...

to explain you quickly :

you start with like 7 peons, the first thing to do in the map Texas, is to go to kill the deers ( because they are smaller than the bisons ) so 2 for the deers, and the rest to cut woods. And then you switch to the bisons, farms etc...

You farm everything, sea and land... to reach an exponential growth.

BUT at this point, you will encounter your opponent that is doing the same thing...

That's where the game start to be ugly... the fastest one in the exponential rush with a good lead will win easly...

However at the end, on the beautifull map of the beginning, there will be only one thing left ( trees, wild life gone ) and it's a giant army...

How sad...

( on a personnal note, if APM don't count it's not a RTS ).

Quote from morganist:

the interest rate is more than just an aggregate demand mechanism.

You know it my dear morganist... why don't you say it fully ? Interrest rates are a eugenist techniks. Like if the one that can better play the game ( created by human ) have more value than others Beings ?

 

[jueco2005]

Quote from MKTrader:

Where did von Mises say that? Minimal government, sure, but I don't think he ever called himself an anarchist. Rothbard was closer to that position.

Like all schools of thought, there are different views within the school. Hayek is on the more mainstream end of the continuum, and even won a well-deserved Nobel prize.

Thank you for clarifying my statement. You are correct and you also made a good point.