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Everything posted by Baltimoron

  1. Everything I placed emphasis on is a strawman or is part of a strawman argument such that i can't separate it from the strawman argument. =================== I am perpetually confused as to why the forum is such that people can just post such lies and misrepresentations. These are are just personal affronts to those who spend their free time trying to positively interact with other members of the community. Wouldn't a respectful person interested in true dialogue say something like "what do you mean by x" or "I understood y to mean..." "how does q fit into this" I'm positive a person disinterested in honest discussion wouldn't do that, but instead would troll and just misrepresent what x or y meant, not bothering to pay any regard to the content of the original messenger. Are we trying to understand what others are trying to communicate or are we simply trying to prove wrong whatever it is we think the other is trying to communicate (and dammed if we care what he really is communicating or trying to say)? Why can some just post whatever nonsense they wish, even as they admits/demonstrate they knows not what they are talking about, and consistently put the onus on those who wish to discuss things to constantly have to either 1) bow out of the confrontation after being shouted down by a blowhard or 2) waste lots of time trying to respond to the inane strawmans that are nothing more than diversions form the topic at hand. Why do we countenance people who post lies? Why do we think calling someone stupid or some such other personal affront is a bannable offense, but intentionally trolling is not? What about ad hominems? Is this not the definition of taking a discussion and making it personal by attacking the speaker? Yet Rshack consistently makes me all kinds of insulting, erroneous and misleading characterizations. I could just post misleading information in an effort to constantly frustrate discussion, to interject sophist nonesense by trying to re-define words and misrepresent other positions, but what good is that? I give a crap about other people, which is why I try to share what I know in this community. Its my understanding that a message board is an opportunity for people to communicate. I believe the ultimate form of disrespect is not listening to someone. One can disagree, and even consider someone else wrong. But to not even bother to respect their communicative efforts, and instead just post fallacious mischaracterizations of their point (so called strawman arguments) is the greatest reproach. There is no communication without listening and respect for another's position. I have expressed on multiple occasions the willingness to discuss these issues with Rshack. Yet instead of responding to what I post, or asking me questions about what I post, he simply tells me I am wrong, misrepresents my argument (i.e lies and posts a bunch of nonsense) and then goes off on his own tangents. Yet this is countenanced, over and over again. Rshack criticizes me for posting sources. Board policy requires sourcing. I don't want to banned but I'm happy to go if the game is posters can just post lies and misrepresentations and personally insulting ad hominems with impunity as such an environment is not for me. Why do we countenance those who simply do not respond and indeed intentionally frustrate the honest efforts of those who wish to communicate? Rshack has trolled me throughout his time on this board. Continually ignoring what I post and misrepresenting it as a strawman. Its obvious he is just trying to take what I post and argue against it, and then I post a little more showing his fallacies and he post more fallacies. This can't go on ad nauseum, as he knows I'll tire of responding to his lies. I tire of arguing with trolls. I honestly used to think I could post here, share my knowledge and make this a better place. I used to think I could share my knowledge here about SABR and the ideas of places like THT or BP or Tom Tango and help people learn to love and understand and appreciate baseball even more. And knowledge even beyond baseball. And whether people agree with me or not, aren't people better off knowing the other side, being exposed to the counter arguments? Isn't that learning? Yet here I am, marginalized once again by a troll, and the burden is once again on me to explain why the stuff he posted is wrong? Why aren't we wondering why he isn't quoting anything I have written? Read the thread, he talks about all kinda of nonesense that has nothing to do with anything I have posted. Why do we assume he has any credibility or grounding in reality? Well, I kinda think I should rest. I live in one of the most beautiful cities in the country and have many friends and a good paying job and spend enough time at the local homeless shelter that I know just how lucky I am despite all the reasons I have to complain about my life. Most of all, there are so many better things to do than to try to communicate with dishonest jerks who can do no better than to lie and consistently attack me. I wish everybody the best and Go Os. -- P.S. - Not like I know anything about economics or such but I wonder if encouraging a more respectful, intelligent "conversation" might help boost readership. After all, we're all just fanatics about a baseball team, looking for good info and somebody to hear us out, a place where blowhards won't shout us down while ignoring what we post. Guess I shoulda done a barrel roll.
  2. Its the same answer to every question (excepting the most minarchist functions of the Night Watchman* State). I'll give you a hint. :scratchchinhmm: F_ _ _ M _ _ _ _ _ If you guessed "Flea Market" you are so very close. --- * Yup, "V for Vendetta" and "Watchmen" are anti-statist graphic novels, for as you might know Alan Moore is an anarchist too. The movie Watchmen and the somewhat limited acceptance it received is what inspired me to revive this thread. I should get into that.
  3. I sense sarcasm and monetary envy (sorry if I am mistaken). Were the shareholders better or worse off for Mr. Icahn's intervention? If the MSM (mainstream media) label it as a sweetheart deal for Icahn, who as we know he gets in position for such deals because of his ownership of stock, hasn't he also earned such a deal for other shareholders? Isn't that the point, to protect the capitalists (anybody who buys stocks or otherwise saves their income) from pillage by the corporatists? What was sweetheart was that the powerful elite class, the corporatists, could not be protected from the great capitalist heros, the raiders. So the ruling corproate elite class got the MSM to work on the public and eventually got the federal and state legislatures to fall in line and we put the kibosh on protecting shareholders, all in the name of preventing "unfair profits" and punishing the evil raiders. See how this is so easy. Raiders should be highly compensated, they protected share holder wealth on an order of many multiples of their earnings. And the alleged "unfair profits" are a good thing, because they are a signal to others that says in effect "our corporations are being bilked and run like crap, and thus there are huge buyout arbitrage opportunities here for those who will stand up in the name of economic progress and efficiency and protecting the shareholders by doing what is in their own self-interest." ===== Yup, greed is good, as it regulates the greed of others. The trouble is when you start granting monopoly power backed by the threat of violence to the greedy - aka the State.
  4. Chanda Chisala is human rights activist and reporter from the African nation of Zambia who spent last year on a fellowship at Stanford studying “the impact of the internet on the future of African journalism, and the philosophy of human rights.” He thinks capitalism will save his continent and defend against human rights abuses. He yearns for freedom and writes:
  5. Hi Rshack, I'm sorry you have little economic knowledge and most of it seems to be horrendously mistaken. Your posts in this thread make clear you know nothing of Austrian economics, much less economics in general. This makes me sad. But as long as you insist you know what you are talking about and everybody else is wrong, like for example your belief you know what mercantilism or capitalism entail, I'm going to have to put you back on my ignore list. I'm disappointed but not at all surprised. I guess my lesson is blowhard know-it-alls can't really be expected to change their ways, especially when they have such a long and well-defined history and pattern of similar trolling. If you ever want to have a respectful discussion instead of lecturing me with posts chock full of your fallacious mis-understandings, send me a pm. You may not agree with the Austrians, but you can't define words and concepts for them and then use your definitions and your concepts to argue Austrians are wrong, because that's just a resort to a silly strawman argument. The Austrians may be all wrong, but as long as you wish to remain willfully clueless of their thoughts and theories, your idle ramblings are just that, idle ramblings. bye.
  6. Corporatism is a system of legal privilege that protects the structure of a corporation against capitalists. For example in the USA shareholders have little power over the major industries other than as someone a dividend must be paid to. The executives in the corporate hierarchy control the corporation, the capital-owners control nothing. Big corporate executive salaries and golden parachutes and incentives to cook the books and maximize wealth in the short term that funnel wealth from the rightful capital owners. This is not free-market Capitalism (see the legal, G does that). One could say Corporatism is just another name for Mercantilism, with Mercantilism being defined as the use of force by the State to produce particular winners and losers in the market (In Mercantilism, exporting businesses are favored by the State, in Corporatism, the class of individuals who control corporations). The leftist view of the question in terms of profit tends to lead one to see Mercantilism/Corporatism as just a species of Capitalism. I see Corporatism as a subset of Mercantilism. Both involve the State's threat/use of force as an essential feature to its existence. ===== What is a Capitalist? Murray Roth bard's Man, Economy, State - Chapter 6, 5. Time Preference, Capitalists, and Individual Money Stock ===== The (Free) Market for Corporate Control ... Poison Pills and Anti-takeover measures are bad, or why Drexel Burnham Lambert was the hero:
  7. <p><p><p>No, I didn't see Dr. Block in Baltimore as I live in Colorado, but I did see him in Colorado Springs (<a href="<a href="<a href="http://blog.mises.org/archives/009778.asp" rel="external nofollow">http://blog.mises.org/archives/009778.asp</a>" rel="external nofollow"><a href="http://blog.mises.org/archives/009778.asp" rel="external nofollow">http://blog.mises.org/archives/009778.asp</a></a>" rel="external nofollow"><a href="<a href="http://blog.mises.org/archives/009778.asp" rel="external nofollow">http://blog.mises.org/archives/009778.asp</a>" rel="external nofollow"><a href="http://blog.mises.org/archives/009778.asp" rel="external nofollow">http://blog.mises.org/archives/009778.asp</a></a></a>).</p></p></p>

    <p><p><p>Did you see Dr. Block's video presentation in response to the fallout from this Baltimore brewhaha? Its here: <a href="<a href="<a href="http://mises.org/media.aspx?action=author&ID=443." rel="external nofollow">http://mises.org/media.aspx?action=author&ID=443.</a>" rel="external nofollow"><a href="http://mises.org/media.aspx?action=author&ID=443." rel="external nofollow">http://mises.org/media.aspx?action=author&ID=443.</a></a>" rel="external nofollow"><a href="<a href="http://mises.org/media.aspx?action=author&ID=443." rel="external nofollow">http://mises.org/media.aspx?action=author&ID=443.</a>" rel="external nofollow"><a href="http://mises.org/media.aspx?action=author&ID=443." rel="external nofollow">http://mises.org/media.aspx?action=author&ID=443.</a></a></a> He has also written a lot at LRC on this issue: <a href="<a href="<a href="http://www.lewrockwell.com/block/block-arch.html" rel="external nofollow">http://www.lewrockwell.com/block/block-arch.html</a>" rel="external nofollow"><a href="http://www.lewrockwell.com/block/block-arch.html" rel="external nofollow">http://www.lewrockwell.com/block/block-arch.html</a></a>" rel="external nofollow"><a href="<a href="http://www.lewrockwell.com/block/block-arch.html" rel="external nofollow">http://www.lewrockwell.com/block/block-arch.html</a>" rel="external nofollow"><a href="http://www.lewrockwell.com/block/block-arch.html" rel="external nofollow">http://www.lewrockwell.com/block/block-arch.html</a></a></a></p></p></p>

    <p><p><p>Cheers, be well</p></p></p>

  8. Marx was wrong. A quickie. Mises in 1951: ========= Murray Rothbard, 1976, Praxeology: The Methodology of Austrian Economics =================== Bob Murphy, 2003, Mises's Non-Trivial Insight
  9. "All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident." Arthur Schopenhauer, German philosopher (1788 - 1860) Maybe the Austrians are all wrong. But history makes clear acceptance of truth is evolutionary. People used to think the Earth was flat after all.
  10. I have two posts responding to Lucky Jim on Derrida, and a response to Clapdiddy. ========== Isn't this what we do in school? Teach kids by giving them stuff to read so they can learn. I'm not sure why you dismiss my references to scholarly articles and other sources, or my excerpts and highlights of pertinent passages. Are you against education? Do you not read? Don't you discuss new ideas with others? Is this not the point of a message board, to share ideas and opinion? What is a syllabus on indoctrination? Is this a cult reference? How many "public" cults are there that try to get people to listen to their ideas and arguments in public? Or more accurately, what is not a syllabus for indoctrination? If I post something from Tom Tango, or from Baseball Prospectus, is that a "syllabus for indoctrination"? Why is it not an idea for discussion, or an explanation of a concept? I'm appealing to intellect by offering ideas and arguments advanced by scholars with advanced degrees in economics. There has been a lot of banter about what Austrian believe and who they are, and I feel a lot of that is misleading. So I'm presenting their words and ideas. I've made two posts on my own hand (see all the typos/misspellings, disgraphia is the suck) explaining the theory for which F.A. Hayek was awarded the Nobel prize in economics. There is a lot of ignorance on economics, and a lack of exposure to it. Is your objection about economics, or just certain schools of economics? I think the Austrians are right on a lot of issues. I got an undergrad in econ and have always had an interest in economics. And I like their ideas, becuase they make sense. ====== I'm sharing what I believe to be a destroyer of wealth and a cause of widespread pain and suffering to my fellow humans. Unemployment and its related social ails, poverty, war, etc. Bad stuff. This is the rants forum. I am ranting about the perceived nonsense that is happening today. People are being hurt. Remember Bruce Springsteen's "Born in the USA"? A song that had such appeal because it both spoke to the promise of our supposed great nation of idealistic potential, and contrasted it with the harsh reality, the failure of recent government, of a silly war that had ruined lives, families, and communities. Prosperity and a chance were denied to so many. Similar themes. We could do so much to help humanity, but yet we do not. That makes me sad. So I post in the Rants forum and explain my point of view and the economic ideas I think are correct. ==== I'm sorry the study of economics is not a simple matter. As is obvious, many brilliant humans have devoted their lives to the study of economics. There are different schools in economics. Austrians are on board with most schools on a lot of stuff. But they also differ from the other schools. Just as the other schools differ from each other in their own way. Otherwise they wouldn't be different schools. I'd be happy to have a respectful discussion with you. I've made that clear to you. What is on your mind? ========== If you want you can ignore this thread, as can everyone else too. It won't bother me. But I like econ, and I think people deserve to the right to hear all sides to a debate. There are a lot of intelligent people here. What's the harm in my publishing/discussing it? Won't that just expose it for all its silliness? The ship will sink itself, you can just sit back and watch.
  11. Robert Higgs has written extensively on the Great Depression. ==== Here is a December 2008 interview with Russ Roberts (Ph.D. in econ from University of Chicago, teaches at GMU), about: ===== Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s is a shortish article by Higgs addressing the Great Depression: ====== A longer piece is this pdf "Regime Uncertainty: Why the Great Depression Lasted So Long and Why Prosperity Returned After the War,". Higgs has also written a book (a collection of longer essays) called "Regime Uncertainty: Why the Great Depression Lasted So Long and Why Prosperity Returned After the War,". ======== here is Higgs' 33 minute speech (youtube video), which looks at the connection between monetary inflation and war funding. He examines budgets, inflation and such in the US in WWI and WWII. Its a lot easier to fund a war by printing money than it is to tax people the full amount (assuming its not such a small war it can be fought out of present inventory). Here is a pdf file Dr. Higgs discusses in Death Fuel lecture that details budgetary information from WWI and WWII.
  12. Here is one of my favorite pieces by Bob Murphy in which he responds to criticism of ABCT from Paul Krugman and Tyler Cowen. Murphy explains the importance of capital consumption to ABCT, or what happens when we don't really save but simply keep consuming and thus do not release resources into the economy to support newly undertaken allocations of productive capital resources. A Sushi Model of Capital Consumption
  13. In Human Action, Ludwig von Mises uses the example of a master builder who is building a house but he is under a misleading impression as to how many bricks he has to explain ABCT. The master builder thinks he has 20% more bricks than he actually has (Mises posits he can’t buy more bricks). So the master builder begins building a house, but he is building the wrong kind of house, as he would build a different house if he knew how many bricks he actually had. In the master builder’s microeocnomy, the pool of real savings is not large enough to support his house. The master builder is undertaking a project he will not be able to finish. What would be the best way to get the builder out of this predicament? To alert him as to the real supply of his bricks, to tell him he is building a house he will not be able to finish. And you want to do this as soon as possible, not right before he runs out of bricks, because he has to demolish the partially built house and start anew. We see the master builder has squander society’s resources by undertaking a project that cannot be completed. The boom period, when he is building the house and employing lots of peoples, that is when is doing the damage, wasting the resources. The bust period is when he is fixing his past mistake, correcting his prior waste of resources and labor time. This is the healthy correction of his prior error. Applying this example to the real economy, we can see why its best to find out now what is unsustainable, to stop it and start viable, sustainable projects. Not to prop up the unsustainable, non-viable projects that squander capital and labor on what could be seen as quixotic production paths, on unsustainable production trajectories. When people say the solution is to pump more money into the system, they are saying lets drive the interest rate down to keep entrepreneurial investment going. Its sorta like saying lets get the master builder drunk so he doesn’t notice the dwindling supply of bricks and just keeps building the doomed house, he keeps up the inherently unsustainable production. But this does not hold up the bust, the bust is inevitable. Pumping money and other intervention only leads to the waste of more resources as we prop up unsustainable activities. When Alan Greenspan did exactly this in 2001 by lowering rates to stimulate the economy, he refused to let occur the the healthy process that is the reallocation of capital to sustainable projects during a bust. Greenspan sought to stimulate the economy to fight the bust, he perpetuated this misallocation and squandering of resources in unsustainable liens of production. And for the first time on record, we had a recession where housing starts did not decline. And thus we see the heart of the myths that housing never declines, prices always go up, home prices don’t go down during a recession, a home is the best investment you can make, that you can buy and flip houses and make lots of money with no risk, etc. – the Fed’s intervention in the economy. Greenspan kept the master builder drunk, and we kept building houses and commercial/residential real estate developments that we did not have the savings to consume. Bust. ========== Bob Murphy (Ph.D. in Econ from NYU where he studies under Israel Kirzner and Mario Rizzo) expounds on thsi idea in Mises's Example of the Master Builder
  14. Think about building something complex like an airplane. You have to build all the factories to build the various parts, you have to build all the necessary equipment before you can even think about building the airplane. And you have to plane and do all kind of science to learn how to fly and then you have to educate your workforce, you need highly skilled engineers and mechanics and etc. You have to build an enormous plant that takes years to build and requires huge hangars and lots of land. The inputs themselves involve multiple stages of production. This means for example producing x, selling it to another producer who puts in into z, who then sells to another producer who adds it to W, and so on until it is finally incorporated into the final consumer good. ============ Leonard Reeds’ classic article 1958 article “I Pencil” beautifully illustrates this point. The article is written in the first person from the point of view of an Eberhard Faber pencil. The pencil narrator details the complexity of its own creation, listing its components (cedar, lacquer, graphite, ferrule, factice, pumice, wax, glue) and the numerous people involved, down to the sweeper in the factory and the lighthouse keeper guiding the shipment into port. It illustrates the complex capital structure necessary to make a simple pencil. I, Pencil. My Family Tree as told to Leonard E. Read ========= As Sheldon Richman has commented: I Pencil Revisited
  15. Here is another short and unfairly brief attempt to convey a sense of what the Austrian Business cycle theory is about. It is in no sense intended to be a complete or anywhere near the best or a scholarly explanation of ABCT. Austrian Business cycle is all about capital theory, and the importance of the interest rate to the allocation of capital. In ABCT there is a strong recognition of the role of interest rates in the economy. Its not just number, interest rates play a “coordinating” function in the economy. When the interest rate is unhampered and allowed to perform this coordinating function, what the interest rate does is coordinate production over time. ABCT is all about intertemporal allocation of capital across various stages of production. When we save more, and interest rates consequentially decline, that is the very time it makes sense for businesses to engage in projects that are going to bear fruit in the future. When we save more, we are forsaking consumption now for consumption in the future. It is this desire for future consumption that investor/entrepreneurs are preparing for in investing in future production, in capital intensive products. The investors/entrepreneurs can make these capital investments because we have saved and thus interest rates are low, making borrowing more attractive than at higher interest rates. The longer term the production is, what is often referred to as multiple stage production or complex production stages, the more interest rate sensitive the production. Interest matters more when you make a 20 year loan to develop property or to build a factory than it does over a shorter time frame. The interest rate coordinates consumer’s desires to consume in the present versus the future, and business production of good for the present and the future. By saving part of one’s income, one is forgoing a claim on the current resources out there in the economy and freeing these resources up to support more complex, longer stage production. This deferral of present consumption releases resources into the economy, which provide the material wherewithal to see all the new business projects undertaken by entrepreneur/investors through completion. The interest rate in effect coordinates the supply of real saved resources in the economy. ABCT basically says when you tamper with the structure of interest rates as the market sets them, you are tampering with the coordinating function of capital production in the economy, introducing dis-coordination. So now, if for example a Central Bank wants to force interest rates down through open market operations, we see that the public has not necessarily indicated a desire to consume in the future, yet investor/entrepreneurs are being told (and incentivized) in effect by the lower interest rate to begin more capital intensive, longer term stage investment for the production of future goods. But people are not saving, they want to consume now. Yet businesses are being encouraged to engage in production of the future, in long term investment. People are demanding more goods for consumption now, but entrepreneurs are being mislead into engaging in long term product development, in producing for the future. Thus we see the time mismatch, or what Austrians call the intertemporal misallocation of capital resources. In the initial short run we see the boom, as present consumption stays high while we see artificially lowered interest rates stimulating what is ultimately unsustainable entrepreneurial production. We are buying TVs and building stuff like houses and cars. The houses and cars require lots of inputs, lots of other factories have to be built and stuff made to put into the houses and cars. So unemployment goes down during the boom as society culls its resources to engage in capital production in response to low interest rates. ===== Just because a Central Bank forces interest by pumping money into the banking system does mean consumers are deferring present consumption. The pumping of money to drive down interest rates does not release any more resources into the economy for investor/entrepreneurs to use to complete their long term investment projects. With artificially lowered interest rates you have an unchanged resource pool to fund all the new long term capital production projects. There are not enough resources to fund all of these projects, and you have a bust as resources dry up and projects have to be abandoned. The investment was not financed with savings, but with printed money. Printed money is not a capital resource. Printing money does not produce anything of value, it just misleads people to think this is the case. Printing money to lower interest rates just encourages more wasted resources as investor/entrepreneurs are incentivized to undertake long term projects that they will not be able to complete. They will have to abandon these projects, and thus squander (waste) valuable human and physical resources (capital resources). Keeping interest rates down is not the cure for a recession/depression, it is the cause. Artificially low interest rates are what gets entrepreneurs onto these unsustainable future investment trajectories. If you keep interest rates artificially lowered you just keep encouraging people to plan, design, build and make things that ultimately can’t be finished or won’t be profitable or for which there won’t be sufficient consumer demand in the future. =========== Austrian Business Cycle Quickie: 1. The FED lowers the rate of interest below the natural rate. 2. This creates a boom. 3. Misalignment sets a course of events into line that is seen as "prosperity" (increase in average standard of living), but it is really an illusion. 4. The boom is really an accumulation of malinvestments. 5. The bust is a necessary and beneficial liquidation of malinvestments, which are really misallocated resources (wasted resources). * The Austrian Business Cycle theory is a theory of the boom-bust cycle, not just a discussion of recession. The ABCT does not say that all recessions are explainable by the ABCT; albeit, most modern business cycles are ABCs. Earthquakes and natural disasters and foreign invasions are other things that for example could impact economic production and cause economic busts. ** As is sort of implicit, the real issue is the expansion of credit. While the modern business cycle is dominated by the Governmental injection of money into the economy that drives interest rates lower, ABCT is really a tale of the artificial expansion of capital. "Tulipmania" is a famous episode that can be explained by ABCT and the boom/bust of credit expansion. Doug French studied at UNLV under Murray Rothbard and has written and studied Tulipmania extensively. From The Truth About Tulipmania: Here is Mr. French's review of Tulipmania: Money, Honor, and Knowledge in the Dutch Golden Age by Anne Goldgar. Doug French has also published a book on Early Speculative Bubbles & Increases in the Money Supply. The Chapters:
  16. Thanks clapdiddy, It sounds like Amity Shlaes is into Monetarist/Milton Friedman themes, which are more in keeping with modern mainstream Republican conservatism, or a brand of limited statism. I threw in some comments, thanks again for posting this. Austrians like to joke that the politicized Republican brand of conservatives just sounds likeAustrian economic theory when they are out of power, and usually then point out the contradictions between some claims and deeds, like in this 2006 piece Bush: link or September 2008 Lew Rockwell piece The broader point being that the world is perhaps not as simple as it is sold to us, and the spectrum is not perhaps as simplistic as the bipolar Democrat/Republican. Republicans and Democrats both favor big government, but big in their own way. As Walter Block will argue, the differences are essentially rhetorical and in practice over marginalia. Here is 16 minute Lew Rockwell lecture on the Left, Right, and the State. ============= In Austrian thought, the big issue here is the 'economic calculation problem." This idea began in Mises seminal essay in 1920 Economic Calculation In The Socialist Commonwealth Ina nutshell, Mises demonstrated that a centrally planner in a socialist state cannot allocate productive factors in a manner consistent with consumer demand because the planner does not have the ability to calculate in terms of market prices. Ina free market, prices result from a competitive bidding process among decentralized private property owners who are seeking to earn profits/satisfy their needs/wants/desires. Prices in a free market are an expression of consumer preference. In the absence of a market, prices are arbitrary, and producers are without information (the prices) that signal to them what people want. So you end up with an economy that keeps mis-allocating and squandering resources on production people don't want or need or can afford or which the pool of capital resources can't sustain. Inefficiency is the norm, and perpetuates itself. You get massive shortages and sniffled innovation. ============= Austrians and most mainstream economists are all on board here. Its hard to be better off without free trade, or the idea of the division and specialization of labor. From Lawrence Reed's Great Myths of the Great Depression I posted above: is Lawrence Reed (B.A. Econ, Master's History) giving a 15 minute youtube lecture about the "Great Myths of the Great Depression"====================== We'll just say that the Austrians are not on board here and are diametrically opposed. Austrians see the bust as inevitable consequence of the prior unsustainable boom and a period of necessary re-allocation of capital resources into more productive uses. Most everybody else thinks deflation is bad (why are falling prices bad for an economy) and we need to fight it to keep going what we had, to re-inflate. This theory is perhaps the most significant work of Milton Friedman. Friedman and Anna Schwartz's "A Monetary History of the United States, 1867-1960," Some joke that Freidman didn't write, he just put his name on it and Anna Schawrtz did all the work. The foototes and research are voluminous. This is (in a nutshell) the FED didn't pump enough money into the economy theory, and Ben Bernanke loves this: link ========= Did she talk much about the policy influence of British Economist John M. Keynes? On socialism, fascism and communism: link Communism (little c) is generally a subset of socialism, a socioeconomic structure and ideology that promotes a classless, egalitarian, classless society based on common ownership and control of the means of production and property. Anarcho-communism is the stateless version that is akin to a voluntary commune, or for example a convent of Catholic nuns. ============= Here is a pdf of some budgetary information on this era from Robert Higgs (super scholar on WWII, Ph.D. from Johns Hopkins in Econ). Spending was a big point of the New Deal. Austrians (especially Walter Block) like to point out that its not jobs that we want, its economic prosperity. Bock often goes reductio ad absurdum and points out we could ban interstate shipping and require everybody to carry no more than 50 pounds of cargo and thus employ everybody. But that would be obviously horrible for the economy. Roosevelt allocated money in large part based on the vote margins he had in particular locations. Loyola econ professor Tom Dilorenzo disucsses the politics invovled in distributing new Deal money in A Recipe for the Next Great Depression, a 25 minute lecture from April 2009. He discusses how Roosevelt spent little money in the south because the South still hated Republicans becuase of Lincoln/civil war and would voted Democrats pretty heavily. =================== Dr. DiLorenzo also discusses the politics of attacking big business (ironic as the boom of the roaring 20s was actually caused by a Government fueled expansionary credit boom - ABCT). Good thing nobody says stuff like that today (oops). Unions and minimum wages hurt poor people and cause unemployment. Minimum wages represent a hurdle of productivity over which you have to get a job. Unions are cartels that artificially restrict the pool of labor. ======== No surprise ========= Nice juxtapostion there. Thanks for the review. Many Austrians like to point to these parallels too. Here is a 33 minute lecture by Walter Block paralleling the Great Depression with today.
  17. Although definitions vary, economics is commonly defined as a social science that studies how people choose to allocate scare resources. The essential issue is one of scarcity. Food, clean air, cars, oil, etc. There are people and a limited amount of more stuff . Generally speaking, capitalism, or private property and the freedom to use one property, is by far the best way of producing wealth, or the amount of stuff we have. While we can't be rid of scarcity, we can make more stuff (i.e. we have more food than people did 100 years ago). The enviros and consumerism haters need not freak out, because stuff isn't necessary either bad for the environment or consumerist. Like green technology and classical music. We can talk more. === Austrian Business Cycle theory was developed by the early Austrians, mainly Mises. Hayek expounded on it in a "mainstream friendly" way and won the Nobel Prize in economics in 1974 for his work on Austrian Business Cycle theory. I'm not endorsing the Nobel prize in economics as a barometer of much, but it is mainstream recognition that Austrian theory. Hayek gave an interesting lecture too, calling out mainstream economists in 1974 The Pretence of Knowledge: ==== In a nutshell, a rough sketch of Austrian Business Cycle theory: Interest is the price of money. Interest reflects the fact there is trade-off between consuming now and saving, or deferring consumption until the future. Interest reflects the fact people prefer things now as oppose dot later. Interest rates are the price of money (credit, or the price of borrowing money), and they come down when banks have more money to lend (greater supply of loanable funds = lower price for loanable funds). One way interest rates come down is people save more, giving the banks more to lend. The other way interest rates come down is the Central Bank forces the interest rates down through monetary policy, or pumping the banks with newly printed money Anyway, there are different consequences for the economy depending on how the interest rate is lowered. When interest rates fall because of savings, that is good. Savings mean people are deferring consumption until the future. When interest rates are lower, that is when businesses, particularly capital intensive producer goods. The savings that drives the rate lower is a demand for future consumption, and in response business engage in projects aimed at the future production of goods. In saving and not consuming as much, resources are released to be used by entrepreneurs to engage in development of future goods (a production boom, like the building of houses, or previously dotcoms and telecomunications). So we have a time match, future demand, and future production. But it is a different case when interest rates fall becuase a Central Bank forces them down. We have businesses who begin to invest in future production with the low interest rate (the boom), but there is not enough savings to support the completion of those projects and future production (a big bust will be coming). This is a time mismatch, as people want consumption now and entrepreneurs are building for the future. When the interest rate is magically forced down by the Central Bank, there are not any new resources produced, just newly printed money that is pumped into banks. What happens is that resources are used to satisfy present consumption demand, and as there is not a sufficient pool of real savings to support the artificial boom,and this boom is cut short as funding dries up (the bust) Interest rates and capital production are very sensitive, and Central Bank intervention in the interest rate messes with this delicate balance. The interest rate is a balance that coordinates production over time. ==== When the boom busts, politicians than push for stimulation and bailouts in an irrational attempt to keep the unsustainable boom going. As you might expect, frequent elections in our democratic society (and the nonsensical inanity of our MainStream Media (MSM)'s dumbed down groupspeak) tend to make our leaders quite short term oriented (OMG who cares about our silly, silly national debt?) Austrian economics is the story of the boom bust cycle. ==== Dr. Roger Garrison teaches at Auburn and is an expert in Austrian Business cycle theory. Here is a decent starter text, and here is a lecture from Dr. Garrison on Austrian Business Cycle theory.
  18. “The harm done… was that they removed economics from reality. The task of economics, as many [successors] of the classical economists practiced it, was to deal not with events as they really happened, but only with forces that contributed in some not clearly defined manner to the emergence of what really happened. Economics did not actually aim at explaining the formation of market prices, but at the description of something that together with other factors played a certain, not clearly defined role in this process. Virtually, it did not deal with real living beings, but with a phantom “economic” man,” a creature essentially different from real man. -Ludwig von Mises, The Ultimate Foundation of Economic Science The Austrians in many respects build on the classical thinkers, a opposed to the successor (Neo-Classical/Neo-Keynesian). ----- If you have ever encountered formal economics and become discouraged by its robotic, rigid seeming humans, the “rational actors” that seek to “maximize their utility” and are alleged to undeniably follow a set of equations. Or perhaps the silly assumptions made in even the most basic models, assumptions that we are told are “incorrect” but close enough or the kind we can ignore to see the issue being shown by the model. The Austrian School of economics is an alternative to this more mainstream approach. It places economics on a sound, human basis. It avoids the traps that plague most of modern economics: the assumption of selfishness as the basic human motivation, a narrow definition of rational behavior, and the overuse of unrealistic models. ------- The Austrian School has nothing to do with the economics of Austria. For example, the Chicago School of economics has nothing to do with the economics of the city of Chicago, but is named that because its thinkers, most notably Milton Friedman, were associated with the University of Chicago. Similarly, the early Austrian thinkers like Eugen von Böhm-Bawerk, Carl Menger, Ludwig von Mises, and Friedrich Hayek were from Austria. The school scattered after the Nazis occupied Austria, and the school reemerged around the 1950s, primarily in America but elsewhere, with some prominent names being Henry Hazlitt, Murray Rothbard, and Israel Kirzner. I really like Murray Rothbard, and consider his 1962 Man, Economy, and State perhaps the definitive text on Austrian Economics. Its written as an undergraduate text on economics so its not too daunting.
  19. People often wonder about the Great Depression, and why the Austrians disagree with the typical claims that the New Deal and/or the War Ended the Great Depression. The seminal text is Murray Rothbard's America's Great Depression. Here is a free pdf of the book. --- For a shorter analysis, The Foundation For Economic Education (FEE) has put out a short price on the Great depression Great Myths of the Great Depression. Excerpt: ----- For a discussion of what happened to the US economy after the war, see The Great Depression of 1946 (pdf). The title is a tongue in check on the idea that GDP fell because we stopped the war (a huge reduction in Government spending) but employment did very well and there was nothing close to a depression as the economy did exceptionally well when more or less released from massive interventionist constraints.
  20. Dr. Thomas Woods went to Harvard and the received his Ph.D in History from Columbia. He is a senior fellow at the Ludwig von Mises (pronounced Meese-is) Institute. He has recently written a book called "Meltdown." This book presents an Austrian perspective on the recent economic crisis. It also introduces the Austrian business cycle and discusses historical events (Mr. Woods' forte) from the perspective of Austrian economics, including a chapter on the great depression. Meltdown is aimed towards explaining Austrian ideas towards a lay audience with no economic training. ----- On Apr 15, 2009, Dr. Woods will be giving a free lecture at Loyola College, Baltimore, MD Knott Hall B01, at 7:00pm on his book, "Meltdown." ------- A reason Dr. Woods is coming to Baltimore is that Dr. Thomas DiLorenzo, who is a Senior fellow at the Ludwig von Mises Institute, is a professor of economics at Loyola. A list of professors associated with the Ludwig Von Mises Institute can be found here. There are other Austrian groups too, such as those affiliated with George Mason (although some also work with the Mises Institute). The point is while the educational world is not very Austrian friendly, Austrians are re[presetned in academia. Another prominent and Maryland based Austrian Written is William L. Anderson, who teaches economics at Frostburg State. Some of my favorite Austrian economists are Dr. Joe Salerno, Dr. Jörg Guido Hülsmann, Hans-Hermann Hoppe and the best of all IMO, Dr. Walter Block.
  21. Further reading on Hermeneutics, on can see Dr. David Gordon's Hermeneutics vs. Austrian Economics. David Gordon hold a Ph.D. in intellectual history from UCLA. I like David Gordon, but he is no Murray Rothbard. This piece is more about Heidegger and Gadamer than the more flamboyant views of Derrida, but you can see the base of the objection and where the argument might go. An excerpt: ==== Dr. Gordon often reviews books. Here is David Gordon's review of philosopher Stephen Hicks's "Explaining Postmodernism: Skepticism and Socialism from Rousseau to Foucault." An excerpt:
  22. On Jacques Derrida. Hermeneutics is not too favored, especially post-mordernism/post-structuralism like Derrida and Foucault whose stuff was based a lot on Heidegger. Hermeneutics is really just text interpretation (biblical) that sorta got out of hand from there. What lets them look smart is their skill in playing with words and shifting the meanings, appearing to cicumvent the rules of logic. They'll insist that you already applied (unproven) value judgements in your argument and that is why it must be flawed. Invariably post-structuralists succeed in their aim, which is to get you into a more lengthy and more complex argument about meaning and words and some other nonesense that wastes your time. Most normal people will throw the towel and not desire to play the strawman game. That result tends to make their "philosophy" so attractive to halfwitted academics, since they believe that this means they've won the debate. Murray Rothbard has addressed these issues in 1989's The Hermeneutical Invasion of Philosophy and Economics
  23. Tango & MGL - http://www.insidethebook.com/ee/
  24. Its sorta after the fact but on March 10 the magazine Economist had a debate on Keynesian Stimulus, or the spending package on infrastructure and such designed to jump start the economy. The debate asks the question are we all "Keynesian now." Without getting into the question of whether Keynesianism is broader than merely fiscal stimulus (it is unquestionably IMO), it is interesting that it appears their is strong dislike for the stimulus package amongst professional economists. Economist article ---- The Issue --- For stimulus: Prof. Brad DeLong, Prof. of Economics, University of California & Research Associate, Nat. Bureau of Economic Research. Excerpts: I won't interject, but I would strongly disagree with the characterization that Say's law is false. I think Dr. DeLong's analysis as to Say's law leaves much to be desired IMO. --- Against stimulus Prof. Luigi Zingales, Robert C. McCormack Prof, Entrepreneurship & Finance, University of Chicago Booth School of Business, excerpts: While I may not agree with Dr. Zingales on everything, he certainly raises some rather obvious objections to spending more money we don't have. ----- ----- I highlighted the bold for a tangential reason. Sometimes people get confused as to what Austrians are all about. But in case its not clear, I'll state the obvious - war, and war consumerism is the worst thing Government does. For example, take a second and think what it means when someone tells you World War II ended the Great Depression. Don't even get bogged down in the economics. Think about the word depression, and what it means in a general sense. And then ask yourself how the worst thing that has ever happened to humanity could have ended a depression - it was depression. Consider what WWII did - it resulted in the destruction massive amounts of capital and real savings and human activity on stuff that got blown up or shot or destroyed and killed people. Many, many millions of human beings were killed. Much of the productive capacity of Europe was destroyed, millions of children were slaughtered in around the world, Japan and their cities were flattened and burned, and the "victors over evil" handed much Eastern Europe to enslavement under a tyrannical dictator who had already killed some 7 million of his people in genocidal campaign before the war and arguably let to the rise of communism in Southeast Asia and the genocide of 25% of the people of Cambodia (2 million) by Pol Pot. Who was the US to trade with? How could such a waste of life and resources and time and capital made anyone better off? Things got better after World War II not because the War stopped anything, but because after the war stopped, things could not have been any worse than were. Rations, price controls, etc - nobody had anything, stuff went to the war effort and production of consumer goods, both domestically and intentionally, ended. When people stopped dying and Government stopped directing resources to build stuff to blow up and kill other people did things start to get better. WWII did nothing but make the world poorer and far worse off.
  25. Newsweek has a piece on Paul Krugman. The NYT columnist is as you might suspect not an Austrian economist. The Newsweek piece in fact calls him a European Social Democrat. He too is not a big fan of bailing out the banking industry. An excerpt: Newsweek I don't often agree with Krugman, so its perhaps its quite a sign as to where most economists, even those with divergent economic beliefs, fall together on this.
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