Brad DeLong reviews Out of Work: Unemployment and Government in 20th Century America here [http://www.j-bradford-delong.net/Econ_Articles/reviews/vedder.html].
I've not read this work. A comment by Mr. DeLong:
"The first [thing wrong with this book] is that it confuses correlation with causation. It jumps from its observed association of high real wages--high wages divided by the average price of commodities; the "real" purchasing power of what workers earn--and high unemployment to conclude that any (government) action that increases real wages increases unemployment."
An ostensibly Austrian book (it's on sale here at Mises.org) finally gets some mainstream attention and - low and behold - its authors are accused of one of THE VERY THINGS that Austrians condemn mainstream economics for.
Has anyone read this book? Is this a fair or unfair criticism by Mr. DeLong?
Brad DeLong is a twatface. The article is simply an argumentum ad Keynesianism. Still, this treatment is marginally better than his review of The Theory of Money and Credit.
Irish Liberty Forum
No wonder Mr. DeLong's economics are so confused. He reaches page 416 of Mises' The Theory of Money and Credit after a mere two and a half hours of reading. Worse yet, after having invested that much time, all he can muster is that the book is "totally bats---insane".
So I guess that's a wrap on the extent to which Mr. DeLong is willing to learn anything about Austrian economics. And that's a good indication of the willingness Mr. DeLong holds for considering ideas which stand opposed to his favored Keynesianism. Yes, sir, THAT'S a first-rate intellectual.
It gets better. Turn to page 12 for DeLong's treatment of the ABCT, and the "Marx-Hoover-Hayek axis".
http://delong.typepad.com/sdj/2009/01/delong-what-has-happened-to-milton-friedmans-chicago-school-draft.html
If Brad Delong was a moderator here, this thread would be sooooo deleted.
Austroglide:Has anyone read this book? Is this a fair or unfair criticism by Mr. DeLong?
I read the book a while back. I definitely think Mr. DeLong is being extremely unfair. However, the book is not as "Austrian" as I would have liked it to be.
MatthewWilliam:It gets better. Turn to page 12 for DeLong's treatment of the ABCT, and the "Marx-Hoover-Hayek axis".
Yea, that paper is interesting for several reasons:
(1) In it Mr. DeLong - a diehard Keynesian - reveals what he believes to have been the cause of the economic meltdown:
"The current recession has come about because of (a) unexpected losses and defaults in the housing market produced by unwise loans made during a period of irrational exuberance, and (b) a collapse in the risk tolerance of the private sector. These have pushed asset values down, and it is falling asset values that have triggered this global recession."
(2) Also, Mr. DeLong somehow manages to lump Marxists, Friedmanites, and Austrians together under the banner of (paraphrasing) "They all believe the problem to be a surplus in the capital stock" .
Regarding Hayek specifically, he assigns to Hayek a belief in "The fiction that the economy can have a larger-than-sustainable capital stock." This statement reveals that Mr. DeLong misunderstands Austrian theory - here, unsurprisingly of course, he regards the capital stock as homogeneous and believes the Austrian argument to be one regarding the magnitude of the capital stock, as opposed to the specific composition of the capital stock vis-a'-vis its degree of roundaboutness.
(3) In a disappointing finish, Mr. DeLong then rather blithely dismisses Austrian detractors by surmising that the only reasonable explanation for their allegiance to ABCT is motivated by something resembling religion:
"So why then are people attracted to it?...Why on an intellectual and idelogoical level are people attracted to these doctrines?...From my vantage point, at least, the causes of potential cures of our current finanaicl malady are clear. And the consequences of failing to take the appropriate action are also clear. But there is no reason for us as a globe to fail - if we do fail, it will only be because we have ourselves forgotten things about the limits of the market system that the rulers of the British Empire understood very well 164 years ago. Economic policy knowlege will have to have gone that far backwards - and economics will have to have become a branch not of moral philosophy but of moral theology."
Ugh.
*(1) is interesting and deserves its own post.
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