Pluralist Economist Seeks to Lurk, Learn!

Reply

RommelDAK Posted: Tue, May 25 2010 2:29 PM

rated by 0 users

Howdy from Texas!  I am not an Austrian, but feel strongly that in order to really master economics one must remain open to and respectful of all schools of thought.  I am proud to say that my department follows this same philosophy.  In fact, not only do we teach a class that covers various schools of thought--Neoclassical, Marxist, Austrian, Post Keynesian, Institutionalist, New Institutionalist, and Feminist--but it is required of all majors.  I am also the former director of this group:

http://www.icape.org/

This bit from the front page is mine and it is because I really believe it that I am here:

ICAPE is dedicated to the idea that pluralism and intellectual progress are complements. This is not to say “anything goes,” but that each tradition of thought (Austrian, feminist, old and new institutionalist, Marxian, neoclassical, Post Keynesian, social economics, Sraffian, etc.) adds something unique and valuable to economic scholarship. Achieving productive discussion and debate across schools of economic thought is not a simple matter. There are many institutional and practical obstacles to pluralism. It is precisely by helping to remove those obstacles that ICAPE hopes to render a service to the community of economists throughout the world.

Reply

NewLiberty replied on Tue, May 25 2010 2:45 PM

rated by 0 users

Welcome.

Reply

Smiling Dave replied on Tue, May 25 2010 3:53 PM

rated by 0 users

This is not to say “anything goes,” but that each tradition of thought (Austrian, feminist, old and new institutionalist, Marxian, neoclassical, Post Keynesian, social economics, Sraffian, etc.) adds something unique and valuable to economic scholarship.

Very admirable indeed. I'm just wondering, say Group A insists that 2+2=4 and Group B replies with as great insistence that 2+2=5. Is there something unique and valuable that Group B has contributed? Would their possible contributions of, say, pretty graphs be perhaps overshadowed by the total disaster they have wreaked on the world with their phony mathematics?

This is not a theoretical question either. Not to name names, but hopefully as you hang around here more you will maybe see what I mean.

Reply

RommelDAK replied on Tue, May 25 2010 4:21 PM

rated by 0 users

Very admirable indeed. I'm just wondering, say Group A insists that 2+2=4 and Group B replies with as great insistence that 2+2=5. Is there something unique and valuable that Group B has contributed? Would their possible contributions of, say, pretty graphs be perhaps overshadowed by the total disaster they have wreaked on the world with their phony mathematics?

Man, I hope I'm not butchering the formatting on this--I'm not used to the set up in this forum!  At any rate, to answer your question, were there a school of thought in economics whose one and only contribution to the discussion was 2+2=5, then there would indeed be absolutely no point in paying any attention whatsoever to them.  However, I think that this is a false premise--no such paradigm exists.  Hence, there are aspects of Marxism, Neoclassicism, and Austrianism with which I agree and that inform my thinking.  But, at the same time, I am not a Marxist, Neoclassical, or an Austrian.  I am not saying, as I have heard some argue, that every school of thought is correct under some particular set of circumstances (unless we are allowing for alternate realities and parallel universes!).  What I am saying is that, just as the entrepreneur must stumble and bumble her way through the market system, picking up on clues as to which goods to produce and which to sell from various signals that she may or may not be interpreting correctly, so the economist must stumble and bumble, too.  What we want to avoid in this creative process is the arrogance to believe that we are the only smart people in the room.  Ironically, I think the truth will turn out to be quite the opposite!

Economics is too insular.  It's my way (i.e., Neoclassicism) or the highway.  Imagine if we actually talked to each other, at least now and then!

Incidentally, when I was director of ICAPE, the Society for the Development of Austrian Economics was a regular and dependable subscriber.

Reply

Sieben replied on Tue, May 25 2010 5:21 PM

rated by 0 users

Dave is just being inflammatory.

That being said... some of the keynesian doctrine actually does resemble 2+2=5. For example, when GDP = C + G + I + Xnet, keynesians think a decrease in C and be offset by increasing G. What they ignore is that you can only increase G in proportion to how the other three independent variables fall. This is exemplified when economists talk about the crowding out effect etc.

Reply

Smiling Dave replied on Tue, May 25 2010 5:56 PM

rated by 0 users

Dave is just being inflammatory.

And here I thought I was being polite and low key.

Let me put it another way then, in the next post. Stay tuned.

Reply

Smiling Dave replied on Tue, May 25 2010 6:18 PM

rated by 0 users

However, I think that this is a false premise--no such paradigm exists.  Hence, there are aspects of Marxism, Neoclassicism, and Austrianism with which I agree and that inform my thinking.  But, at the same time, I am not a Marxist, Neoclassical, or an Austrian.  I am not saying, as I have heard some argue, that every school of thought is correct under some particular set of circumstances (unless we are allowing for alternate realities and parallel universes!).  What I am saying is that, just as the entrepreneur must stumble and bumble her way through the market system, picking up on clues as to which goods to produce and which to sell from various signals that she may or may not be interpreting correctly, so the economist must stumble and bumble, too.  What we want to avoid in this creative process is the arrogance to believe that we are the only smart people in the room.  Ironically, I think the truth will turn out to be quite the opposite!

Economics is too insular.  It's my way (i.e., Neoclassicism) or the highway.  Imagine if we actually talked to each other, at least now and then!

Incidentally, when I was director of ICAPE, the Society for the Development of Austrian Economics was a regular and dependable subscriber.

I am in agreement with most of what you said, and of course am glad of any opportunity to learn something. I do hope I did not come across as being derisive, because it was not my intention.

Alow me to clarify my point a bit, the one detail that befuddles me in your posts. Take Marx. He starts with 1] a labor theory of value, 2] deduces that profits of the entrepeneur are losses of the laborer, and 3] concludes that the classes are at war with each other by the very nature of their positions in life. Only when the rich, 4] who must be so in only one way, exploitation, 5] are forcefully made to hand back their ill gotten gains, will a fair and happy utopia be acheived. 

Those are 5 basic assumptions he makes, and the Austrian School disagrees with every single one of them. In fact they say the exact oppsite is true for all of them. And we are not talking about trivial details. Each one of those 5 is a big big issue with major repurcussions. Disagreeing on all 5 obviously puts the Austrains and Marxists in almost total disagreement about every facet of economics, as well as more philosophical issues.

Notice also that there is no such thing as partly right here. Each position is extreme, and everyone agrees there is no middle ground. Either value is detremined by the labor put into it, or it's not. Either the enrepeneur gains at the expense of the laborer, or he doesn't. And so forth.

In addition, each of the 5 assumptions of Marx pretty much leads inexorably to the next one.

So, a seeker of the truth, after gathering as much knowledge and arguments as he can from both points of view, can reach one of 3 conclusions: Either Marx is right [that a free market is an evil war], or AE is right [that quite the opposite, it is cooperation with benefit to all], or the seeker still doesn't know.

In other words, the time will come when the seeker has to take a stand on very basic and very vital questions, which will decide his views in a way that forces him to reject the essentials, the very heart, of one theory or another.

So he could be a Marxist who can at most agree that Austrians have done valuable work in some small corner of economics. Or an Austrian that thinks Marxists have gotten some small detail or other right. But the two big pictures are totally at odds. That was my point.

Incredibly enough, the same applies to  Austrains and Neo Classicals, the Keynesians, the whole shebang of Keynes and his spinoffs.

Reply

Bostwick replied on Tue, May 25 2010 6:38 PM

rated by 0 users

Hello, but bewarned the population of this forum is largely amateur/student (myself included).

P.S.

In line with what dave has said, I'd like to ask what you feel Marxism's contributions are. (Feel free to include Keynesianism and others as well)

Reply

E. R. Olovetto replied on Tue, May 25 2010 8:04 PM

rated by 0 users

To the OP: What school(s) of thought do you adhere to and what formal education do you have in economics? Have you read Mises' Human Action or any other major Austrian works?

There's a pretty big divide between AE and these other schools. I would be interested in your comments on this essay.

Reply

RommelDAK replied on Tue, May 25 2010 8:37 PM

rated by 0 users

Dave is just being inflammatory.

Maybe I'm just obtuse, but I didn't take it as the least bit inflammatory (or maybe Dave should try harder!).  I thought that was an excellent point and one I have argued with my pluralist colleagues.  I have no patience for the "everyone is right" approach.  They aren't (in fact, it's possible that none of us is!).  My central point is this: within the profession of economics, each school of thought tends to treat the others as astronomers do astrologists--not only are they wrong, but they aren't even worth talking to.  They are unscientific quacks who are unworthy of the name "economist."  I have heard that characterization applied to Marxists, Institutionalists, Feminists, Neoclassicals, Keynesians, Post Keynesians--and Austrians.

The stand I'm taking is this: that's BS.  I know Marxist economists.  They are bright, hard-working people.  Wrong, in my opinion, but economists worthy of the name nevertheless.  And I don't find everything they say to be useless.  Anwar Shaikh, the Marxist economist at the New School, has a very interesting critique of comparative advantage.  Even if one doesn't buy into it, it's like learning a foreign language--though you might never travel to a country where they speak it, you learn so much about your native language, things you could never have known otherwise.  We all spend too much time preaching to the choir, and the standard we set for "proof" among believers is very low. 

And so, for that reason, I'm interested in hearing what topics are hot among you Austrian types.  As I suggested above, I know many economists who dismiss your school of thought as a pseudo-scientific justification for a particular political position.  I disagree.  I think there's a helluva lot more to Austrian economics that the straw men other approaches attack.  Am I a believer?  No.  Am I willing to accept Austrians as scholars and economists?  Absolutely.

Reply

Curtis replied on Tue, May 25 2010 8:56 PM

rated by 0 users

Welcome!
I appreciate your stance and wish I was pursuing my economics degree at your institution. Reading the forums here will most likely not net you much in the way of solid Austrian theory but I'm glad you made an introduction anyway. I would point you to the literature section and to the work of the modern practicing Austrians for substantive information. 
In the forums we mostly haggle among ourselves about the finer points, and our minor disagreements.

Reply

Bostwick replied on Tue, May 25 2010 9:01 PM

rated by 0 users

Reading the forums here will most likely not net you much in the way of solid Austrian theory

I wouldn't say that.

Reply

RommelDAK replied on Tue, May 25 2010 9:57 PM

rated by 0 users

I am in agreement with most of what you said, and of course am glad of any opportunity to learn something. I do hope I did not come across as being derisive, because it was not my intention.

So, a seeker of the truth, after gathering as much knowledge and arguments as he can from both points of view, can reach one of 3 conclusions: Either Marx is right [that a free market is an evil war], or AE is right [that quite the opposite, it is cooperation with benefit to all], or the seeker still doesn't know.

In other words, the time will come when the seeker has to take a stand on very basic and very vital questions, which will decide his views in a way that forces him to reject the essentials, the very heart, of one theory or another.

So he could be a Marxist who can at most agree that Austrians have done valuable work in some small corner of economics. Or an Austrian that thinks Marxists have gotten some small detail or other right. But the two big pictures are totally at odds. That was my point.

Reply

E. R. Olovetto replied on Tue, May 25 2010 10:04 PM

rated by 0 users

To the OP: What school(s) of thought do you adhere to and what formal education do you have in economics? Have you read Mises' Human Action or any other major Austrian works?

There's a pretty big divide between AE and these other schools. I would be interested in your comments on this essay.

Reply

RommelDAK replied on Tue, May 25 2010 10:04 PM

rated by 0 users

To the OP: What school(s) of thought do you adhere to and what formal education do you have in economics?

Have you read Mises' Human Action or any other major Austrian works?

There's a pretty big divide between AE and these other schools.

 I would be interested in your comments on this essay.

Reply

RommelDAK replied on Tue, May 25 2010 10:11 PM

rated by 0 users

Welcome!

I appreciate your stance and wish I was pursuing my economics degree at your institution.

Reading the forums here will most likely not net you much in the way of solid Austrian theory but I'm glad you made an introduction anyway. I would point you to the literature section and to the work of the modern practicing Austrians for substantive information.