Volume 9, No. 3 (Fall 2006)
It appears that the obvious intent of the recent paper by Professor Barnett and Professor Block (2006), “Gallaway and Vedder on Stabilization Policy,” is to reveal to the Austrian community the fraud that has been perpetrated upon it by us (hereafter G and V) in our 2000 article “The Fraud of Macro-economic Stabilization Policy.” In Barnett and Block’s words (p. 80), “there is every need for a paper such as this present one, which strips away the sup-posed veneer of Austrianism from a publication which is no such thing.” We admire the diligence with which they have pursued their task. Their findings may be summarized as follows: “What is Austrian (Barnett and Block’s points 1 and 6 through 8) in the original V and G article is not new, and what is not Austrian (points 2 through 5) is mainstream, and therefore incorrect.” We do not want to destroy a lot a trees in a detailed line-by-line defense of our position, although nothing that we read by Barnett and Block materially changes our mind on what we said several years ago. We would simply observe that the only theoretical proposition in points 2 through 5 (where we are allegedly non-Austrian in our approach) relates to the positive role that markets play in responding to and correcting any existing discoordination in labor markets. The remaining points consist of either definitions or statistically verifiable propositions. To be sure, one could argue that the notion of statistically verifiable propositions is in itself non-Austrian, but it is a concept embraced by most economists, including, we suspect, many Austrians on occasion. To illustrate our point, whether a time-series is stationary (a definition) can be statistically evaluated. If it is, the property holds whether one is an Austrian, a neoclassical, or a vegetarian, for that matter.
