Attack the epistemology, the reasoning and arguments, the conclusions, or the predictions.
You are right, so here it is. A former Austrian, and still fully pro - market Bryan Caplan
argues extensively against the school from the mainstream economics' perspective. Some of the key points are that:
- Rothbard mises the boat on being against the Neo - Classical approach to utility functions (yet still adhering to it when it was convenient) and prefering value scales instead
- being against the possibility of indifference as an action inducer and refusing to acknowledge that some preferences are never revealed in action
- being against the assumption of continuity in the theory of utils, which according to Caplan should render as a consequence many of possible supply/demand intersections not impossible but very improbable, as from continuous lines they get transformed into scattered points
- that Rothabrd's own understanding of the nature of human exchange forbids him to make strong judgements about both the benefits of voluntary trading and the inneficiency of state action.
- he misconstructs the nature of positive/negative externalities
- Mises was only serendipitously successful on the issue of why central planning fails, as his own stance demands agnosticism from him in this regard
- Austrian Bussiness Cycle Theory is at times inconsistent and for example silently assumes that entrepreneurs are aware of incentives from the markets and can reason on this basis about the future but remain blind to incentives from the governments' policies towards interest rates
- Austrians cannot pride themselves exclusively on explaining correctly why there ever exists stagflation as there are equally good alternative explanations
- Austrians strawman the Neo - Classicals on the latters' methodology.
The only economics school that ever gets anything right is the Austrian school. Mises predicted the great depression. Peter Schiff was predicting the housing bubble and a quick search on YouTube will find videos of everyone literally laughing at him.
Many Marxist economists like John Bellamy Foster were seeing things looming on the horizon
pretty early too (in much accordance with Marx's theory itself), but I doubt this will make you embrace the Marxist analysis of economy. The thing is - when one places himself consistently outside a dominating paradigm and designates as the constant Kassandra, he will get things right each time something ever fails, like a broken clock two times a day, not neccessarily because of intelectual insight.
Many people being passionate about something doesn't make it a cult. The fact that some cultists have embraced Austrian economics doesn't make the slightest difference to its validity. The fact that many Christians agree with it also doesn't make the slightest difference to its validity. Who believes it doesn't matter.
And again, you're right that ideologies are themselves innocent, however ideologists are not. It's one thing when religious loons decide to embrace a particular economic theory, but another when one of the most vocative proponents of this very theory willingly embrace the Christo - Fascists as fellow travelles (this Gary North guy received the Rothbard Medal FFS, I imagine Murray turned in his grave a little that day), and to my knowledge Libertarians don't seem too woried about it, I know I would be if I was one.
My pet theory is that, appart from the common denominator of anti - Communism, the theocrats see the Austrain school thanks to its methodology as kind of a little resurgence of Platonism in the midst of the Empiricist Western world that they think started loosing the touch with transcendence or whatever when we seriously got into quantifying the outside matter and its relations in XVI/XVII century (and next thing you've got - premarital sex and gay people
), hence the guy in my previous post eagerly observes the similarity of the Austrian method to that of a theologian - like the latter derives things about God from axioms, the former "plays society" in imagination - it all never leaves the head.
Edited by chris w, 19 April 2011 - 06:19 AM.
LongeCity
