All human institutions — governments, markets, money, etc. — suffer from the same problem: the imperfections so bitterly denounced by Schmookler. Greed, ignorance, myopia, irrationality are endemic in them all.
Supporters of Kaldor-Hicks believe it useful to have a quantitative measure to assess the efficiency of different situations. Although it may appear convenient to be able to judge policies
oth the establishment of property rights and their violation spring from actions: acts of appropriation and expropriation. However, in addition to a physical appearance, actions also have an internal, subjective aspect.
Austrians have frequently criticized neoclassical economics for the unrealistic character of its assumptions. Neoclassical models are typically “idealized”;
What is certain is that mathematics cannot possibly be a valid means (to advances in economic understanding) unless and until it is used properly. That means that dimensions must be used consistently and correctly.
Although most economists model individual behavior using comparative statics, that approach ignores several important aspects of human action. How do we account for people having opposite responses to the same price change?
We have tried to take Caplan to task for his many errors of omission and commission. Nevertheless, we think his was a very worthwhile article. Why? First, its quality.
The first sections of this paper consider, respectively, the following two problems that arise when dimensions are not correctly included in economic models:
Confronted with the limitations of formalism, many economists have adopted alternative epistemological approaches which are supposed to favor a better understanding of economic phenomena. Among those, hermeneutics has enjoyed a certain success. Hermeneutics is a general theory of understanding based on the interpretation of an external reality testifying to an internal subjective reality. In economics, the interpretive act (or the process of theorization) consists in the ongoing dialogic confrontation between what contemporary economists know and what the individuals under scrutiny express of their own interpretation of the world.
A sizable number of examiners of Austrian economics have come to hold a mistaken view that Hoppe’s and Rothbard’s stances on the nature and status of the action axiom are fundamentally incompatible.
