Economics Questions

Re: Contributions of Austrian economists

Loppu — Fri, 12 Oct 2012 14:27:12 GMT

I will be super original and say Rothbard. He wrote so much, and his writings don't cover only the economic side of libertarianism but also the ethical side of it. And even though if you don't agree with his ethics, you have to admit that writing about ethics is important when you want to promote a certain political position. So yeah, my vote goes to Rothbard.

Re: Contributions of Austrian economists

Neodoxy — Fri, 12 Oct 2012 03:03:09 GMT

"Also, it's ridiculous to called the physiocrats "entirely fallacious" - have you even read any of their works??"

What do you think that the answer is? And you're right, it's hyperbole to call them entirely fallacious, but the majority of what they focused upon certainly could be described as incredibly flawed.

"Sure, Smith's book was famous and influential, but it was just a compilation of ideas well known and a continuation of previous scholarship. It is more accurate to say that he popularised economics than that he spawned it."

If you're misunderstanding me like this then perhaps I'd better reiterate, what you're saying is very similar to what I am saying. Whether or not Smith copied the ideas from other sources, whether or not that's all that he did, it is ultimately from his work that modern economics is primarily descended.

Re: Contributions of Austrian economists

Aristippus — Fri, 12 Oct 2012 00:41:38 GMT

Well now you're just wilfully ignoring those that came before Smith, especially those who called themselves 'économistes'. Also, it's ridiculous to called the physiocrats "entirely fallacious" - have you even read any of their works??

Anyway, your analogy is flawed since the writers that preceded Smith were not nearly as obscure as you imply (they were well-known enough for Smith to copy the vast majority of his ideas from them!). Sure, Smith's book was famous and influential, but it was just a compilation of ideas well known and a continuation of previous scholarship. It is more accurate to say that he popularised economics than that he spawned it.

Rothbard's question on the matter:

The mystery of Adam Smith, then, is the immense gap between a monstrously
overinflated reputation and the dismal reality. But the problem is
worse than that; for it is not just that Smith's Wealth of Nations has had a
terribly overblown reputation from his day to ours. The problem is that the
Wealth of Nations was somehow able to blind all men, economists and
laymen alike, to the very knowledge that other economists, let alone better
ones, had existed and written before 1776. The Wealth of Nations exerted
such a colossal impact on the world that all knowledge of previous economists
was blotted out, hence Smith's reputation as Founding Father. The
historical problem is this: how could this phenomenon have taken place with
a book so derivative, so deeply flawed, so much less worthy than its predecessors?

Re: Contributions of Austrian economists

Neodoxy — Fri, 12 Oct 2012 00:04:58 GMT

What I mean by "founding economics" is that it is clearly Smith's work which inspired the major works, discussions, and philosophers that deal with the subject area which we call "economics". If some guy in an empty room were to divulge all of the laws of mathematics and then never spoke again then we would not attribute the founding of mathematics to him, rather to those who began studying the discipline in such a way that it spawned major debate. This is not to say that Cantillon's work did not influence Smith, merely that it was Smith who inspired economics as broad-reaching, and more importantly independent, discipline and who the first people who called themselves "Political Economists" were responding to and who they were relating their ideas to.

There is a reason why Smith is attributed with the credit, not Cantillon, and this is because the people who first dedicated themselves to studying wealth, exchange, and production in an in-depth and scholarly manner in such a way which would not turn out to be entirely fallacious (physiocrats) were influenced almost entirely by Smith's work.

Re: Contributions of Austrian economists

Aristippus — Thu, 11 Oct 2012 20:48:12 GMT

Yes really. The classical economists were influenced in huge smith, even if the single reason was because he happened to write in English

I was clearly talking about the 'spawned economics' part, and as I said if you really think that's true, outline to me the criteria for 'economics' and explain what's lacking in the earlier writings that is present in Smith (you'll find some fallacies at least!). Otherwise just drop it.

Re: Contributions of Austrian economists

Neodoxy — Thu, 11 Oct 2012 15:06:50 GMT

"Not really."

Yes really. The classical economists were influenced in huge smith, even if the single reason was because he happened to write in English

"That exchange is necessarily beneficial to both participating parties is, for example, a linchpin of libertarianism."

And is something which every division of neo-classical economics.

"I really don't see how Hayek and Mises departed much from them at all."

They focused the entire matter firmly an prettymuch exclusively on the matter of individual action. This is similar to Menger, but much more thorough and much more explicit on the causal factors there.

Re: Contributions of Austrian economists

Vitor — Thu, 11 Oct 2012 05:41:24 GMT

Economics wise I'd give to Mises for his thesis of the calculation problem and also the unification of micro and macro economics.

Rothbard has the activist edge, all his work on ecomonic history and very foundation of the Mises Institute.

Re: Contributions of Austrian economists

Aristippus — Thu, 11 Oct 2012 04:59:54 GMT

There is a very good reason why economists point to smith as the one who spawned economics as a system and that's because it was his work which caused the work of the classical economists.

Not really. It's mainly because most English speaking people couldn't read the works in the other languages well enough and so instead read Smith's compilation of the studies of earlier writers, then repeated the myth ad nauseam that Smith somehow 'spawned economics'.

And my point was exactly that nothing within the original Austrian system necessitated libertarianism, as you are admitting right now.

On the contrary the conclusion to be drawn from it was liberty. That exchange is necessarily beneficial to both participating parties is, for example, a linchpin of libertarianism.

Important does not mean most important.

Meh, that's irrelevant since I was contesting your other claims. Their economic work was clearly based on individual man - in stark contrast to many contemporary intellectuals. The Methodenstreit, and Bohm-Bawerk's critique of Marx were key instances of those two figures engaged in debate against statist intellectuals. I really don't see how Hayek and Mises departed much from them at all.

Re: Contributions of Austrian economists

Neodoxy — Thu, 11 Oct 2012 04:30:53 GMT

"How do they fail to satisfy whatever criteria you're proposing for economics as a social science while Smith satisfied it? Smith was copying their work!!"

That's not what I'm saying, I'm saying that Smith's work is what put the debate and science into high gear. There is a very good reason why economists point to smith as the one who spawned economics as a system and that's because it was his work which caused the work of the classical economists. This would be the case if it turned out that all he did was cut and paste the words of the Spanish enlightenment, Cantillon, and Hume

"I never said that marginal utility theory was sufficient for libertarianism, only that it certainly helps to bolster libertarian arguments."

And my point was exactly that nothing within the original Austrian system necessitated libertarianism, as you are admitting right now. Marginal theory is not sufficient, just a good stepping stone.

"Note that classical liberal philosophy promotes liberty. So you agree with us that they were important in that regard, thank you."

Important does not mean most important. Modern day liberals do some things to promote liberty, this does not make them libertarians or great advancers of liberty.

"Menger's conception of economics was based on methodological individualism. Or were you in fact not talking about economics? (though you said 'AE')"

It was not nearly as developed as an individualist system, nor its conclusions necessarily imply individualism.

@Skeptical Metal

Well they're hard to compare because they kind of target two really different areas, growth Vs. recessionary macroeconomics, but I'd have to say the American system since that at least has a much better chance of achieving its goal of industrialization (not prosperity).

Re: Contributions of Austrian economists

SkepticalMetal — Thu, 11 Oct 2012 03:06:48 GMT

Don't forget about Hamilton, that wonderful creator of the American School!

I'm going to challenge you all by asking which economic school of thought do you think is better, Keynesian economics, or American Economics (National System/Hamiltonian program)

Re: Contributions of Austrian economists

Kelvin Silva — Thu, 11 Oct 2012 03:02:18 GMT

Menger -> marginal utility

Bohm bawerk --> capital theory/structure

mises and hayek --> money/human action, capital structure

knut wicksell (stockholm school) : natural interest rate, influenced austrian theory

Frank a fetter: time preference theory

This is overly simplified

Re: Contributions of Austrian economists

Aristippus — Thu, 11 Oct 2012 02:03:45 GMT

None of their work, however important or superior to Smith's, started up economics as a real social science

If you really think that, define the latter and the differences between Smith and the others in that regard. How do they fail to satisfy whatever criteria you're proposing for economics as a social science while Smith satisfied it? Smith was copying their work!!

"Keynesians accept marginal utility theory, as to all neo-classical economists."

Not in a Mengerian fashion, and with all other kinds of things thrown in. I never said that marginal utility theory was sufficient for libertarianism, only that it certainly helps to bolster libertarian arguments.

Neither of these imply a great deal of libertarian, both are important classical liberal works

His question was on "advancing liberty", not strictly libertarianism. Note that classical liberal philosophy promotes liberty. So you agree with us that they were important in that regard, thank you.

nor did they necessarily set AE on individualist libertarian grounds like either Hayek or Mises did

? Menger's conception of economics was based on methodological individualism. Or were you in fact not talking about economics? (though you said 'AE')

Re: Contributions of Austrian economists

SkepticalMetal — Thu, 11 Oct 2012 01:54:04 GMT

Oh and check out my sig. That scores Menger a point in my book.

Re: Contributions of Austrian economists

Neodoxy — Thu, 11 Oct 2012 01:47:53 GMT

"Are you kidding me? What about Cantillon, Quesnay, Turgot, Condillac, Hume?"

None of their work, however important or superior to Smith's, started up economics as a real social science, or had the influence that smith had. Smith was indisputably the founder of of classical economics, and it was ultimately from Smith's works that the work of the classicals originated.

"Marginal utility theory is extremely important as a foundation of economic arguments for libertarianism."

Keynesians accept marginal utility theory, as to all neo-classical economists.

"Not only that but Menger showed the fallacies of the historicists and contributed to spontaneous order theory, while Bohm-Bawerk took on the Marxists."

Neither of these imply a great deal of libertarian, both are important classical liberal works, but they aren't nearly as radical as we would like, nor did they necessarily set AE on individualist libertarian grounds like either Hayek or Mises did

EDIT

Skeptic,

I'm sorry, I did not intend to come off that way

Re: Contributions of Austrian economists

Aristippus — Thu, 11 Oct 2012 00:27:05 GMT

Whether or not we like it as Austrians, the fact is that Smith made the economic science what it was. Whether or not you think that he started up good discussion, he did start up economic discussion as "its own thing".

Are you kidding me? What about Cantillon, Quesnay, Turgot, Condillac, Hume?

nor did their ideas necessarily lead to libertarianism as they eventually did.

Marginal utility theory is extremely important as a foundation of economic arguments for libertarianism. Not only that but Menger showed the fallacies of the historicists and contributed to spontaneous order theory, while Bohm-Bawerk took on the Marxists.