In the natural sciences, a laboratory experiment can isolate various elements and their movements. There is no equivalent in the discipline of economics. The employment of econometrics and econometric model-building, therefore, is an attempt to fabricate a laboratory where controlled experiments can be conducted.
Despite its great appeal because of its simplicity, the supply-demand graphic as employed by mainstream economics is a tool that is detached from the facts of reality. The real-world economy is far too complex to be faithfully rendered on simple graphs that take no account of uncertainty, entrepreneurial speculation, and the ceaseless change of the market economy.
Mainstream economists are especially critical of Austrians for their lack of desire to incorporate mathematics in general, and multivariable calculus in particular, into their economic analysis. The criticism goes something like this: It does not matter whether or not mathematics is the most appropriate tool to describe economic human action. What matters is that most economists do use math, it has passed the "market test," and, therefore, it is the correct tool to use.
While it is perfectly clear that an individual capitalist or speculator may make losses on the stock exchange, it is very doubtful whether "society" can make such losses. The question with which we are concerned here is whether an individual's losses from domestic stock exchange transactions represent a loss to the society to which that individual belongs.
When individuals are not owners of resources, they are not able to assess their value; and when resources are publicly owned, their use will be systematically hasty and imprudent. When we realize that public ownership leads to systematic haste and imprudence, we get a hint that the inability of assessing the value of resources has deleterious consequences for most of us, with no one to blame except perhaps those who insist on keeping the institution of public ownership in force.
The American nation state has effectively served as the church of this religion in the United States. The American "Vatican" is Washington, D.C., also a unique governing jurisdiction within the boundaries of a nation-state, like its Roman counterpart. Led by its economic priesthood, the American government administers the affairs of the nation to achieve a secular salvation for all its citizens--the attainment of a new heaven on earth.
Athletics, like economics, is an endeavor of human action. While we can see scores and statistics, there is no true way to quantify how good or bad a team may be. Indeed, if the computer polls with their mathematical formulas were so accurate and useful, then one would hardly see the need for a championship game after all.
Contrary to popular thinking, economics is not about GDP or CPI or other economic indicators as such, but about human activities that seek to promote people's lives and well-being. So what are the tools that economists and financial experts utilize in their assessments of the economy? What is the basis of their framework of thought?
I am the first Englishman and the first professional philosopher to receive the Schlarbaum Prize. So it seems appropriate to begin by talking about the greatest English philosopher, John Locke.
The pessimistic scenario is not only that American businessmen, students, and tourists will forever fear to travel in any nation with a Muslim community. It could also mean disinvestment overseas, the further impoverishment of the developing world, a lasting world depression, a world split into major warring blocks, and police-state policies at home.
