Von Mises / Austrian School of Economics

Dude, whatever you are smoking...I want some!

Just kidding, I know from a debate it is incorrect to attack the person instead of the argument, but I despise Paul "We need Space Aliens" Krugman more than any other economist or human being for the matter.

Everytime I see his face I feel like punching him. Look up Paul Krugman and space aliens... eugh.

Use someone else to make the Keynesian argument, Krugman just gets my blood boiling.

 

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Apologies for the delay in responding, but my weekend was busier than expected and I had to reread The Mantle of Science as well as brush up on Hoppe's Economic Science and the Austrian Method. (I can't include links yet due to board restrictions).

First problem here is you've automatically taken the definition of "science" to mean positivist-empricism utilizing the hypothetico-deductive method.

The dictionary says "science" can mean:

1: the state of knowing : knowledge as distinguished from ignorance or misunderstanding
2a : a department of systematized knowledge as an object of study b : something (as a sport or technique) that may be studied or learned like systematized knowledge

If applying an a priori methodology no longer counts as "science" then we have a major problem, not just for this discussion, but because it means we'd have to discount plenty of bodies of knowledge, such as the works of Euclid etc...

From an associate:

‘extrapolate from fact’ is a euphemism for observe then guess. The reason this is not a criteria for science is simple: Science is concerned with knowledge, knowledge does not come from observation. For example, on a right triangle A^2+B^2=C^2 is knowledge and is knowledge if I ‘extrapolate’ from observation of a right triangle or if I reason it out deductively.

‘Falsification’ is used in the empirical methodology preciously because an empirical methodology can never ‘prove’ anything. Empirical laws are ‘laws’ not because they are a statement about a future event but because they have not been demonstrated to be false. Someone employing a praxeological methodology is not under a similar ‘safety check’ because logic is true or false. In the same way you can’t falsify a proof of 2+2 you can’t falsify a praxeologically derived conclusion, the chain of logic is either correct or incorrect.

This is an appeal to authority, not an argument.

This is just a rhetorical metaphor, not an argument.

Do you have an example of this?

To quote an associate: "The capability in humans to reason out entire bodies of knowledge is much more rare than to observe, hypothesize and repeatedely conduct experiments. Not that one is more valuable than the other, both are types of skills, like writing a fugue and writing a rap and both have their respective consumers."

 

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The problem with reasoning out a complex world from first principles is that it was tried, and the scientific method replaced ultimately it. The world is too complex to simply state axioms and then infer truths about the nature of the world, and then call it a day.

It is, in short, not the case that "logic is either true or false" full stop. Your logic can be impeccable and yet your conclusion still inapplicable in the real world because your premises can all too easily be wrong or be to simple to capture the complexity of the real world. Further, without rigorous comparison of your prediction against a real-world outcome (which can be challenging), you can never have any real sense of whether you were right, wrong, or even in the ballpark.

All animals that live in the water are fish.
Whales live in the water.
Therefore, whales are fish.

The logic there is correct, but the first premise is so fatally flawed that it obviously leads to the wrong conclusion in the real world. The problem, as Austrians should realize, is that humans are so very complicated and are the basis of all economic action, so attempting to make virtually any simple statement about their actions or preferences is doomed to be too inaccurate to use as a praxeological premise.

While I know he has his detractors and people effectively refute certain parts of his essay, I have never seen a refutation of "Why I am Not an Austrian Economist" by Prof. Bryan Caplan that I found compelling on the whole.

http://econfaculty.gmu.edu/bcaplan/whyaust.htm

Euclid and his geometry are not "science". Mathematics is not science. That is just a label, and it doesn't mean they are not "true," but it is important to remember that if we looked at the world and we found that, in nature, a² + b² ≠ c². or that the circumference of a circle was not proportional to π, then however beautiful the logic of geometry it would be of vital importance to engineers that they reject Euclid and Pythagoras, and build things that work instead.

It is a beautiful thing when workable theories can be deduced from pure logic. It's often breath-taking. (The original theory of relativity was worked out much that way, and because it was it's results had to be tested, and the theory is still left "falsifiable.") Still that methodology led us astray in the past, and it took the positivist-empiricist tradition to give us modern science and to leave behind things like the Empedoclean elements, the Caloric Theory of heat, and the belief that human health was governed by four "humors."

As Austrians often note, human action is so much more complex than physical theory, so why would the more primitive, less rigorous, system of pure epistemological rationalism be thought of as the super method of inquiry?

I am not a supporter of modern economics either, by the way. I studied it, majored in it, then discovered in grad school that much of it is hogwash, no matter what school of thought you prefer. Economists, Austrian, Keynesian and otheriwse, are often little better at predicting future economic outcomes that shamans of old who'd shake their staves at the sky and tell our ancestors whether the gods would send the floods next year or not. Sometimes some of those shamans would guess correctly too, and their cache would build. Sometimes they'd be wrong, and they'd spin elaborate tales about what events averted the prediction they had made.

I have little doubt and much hope that in a few centuries current economics will come to be viewed as a the "alchemy" of its day—a theory that was fundamentally flawed but that (I hope) leads people to a more complete understanding of how economics actually works. I am pretty sure that a purely epistemological rationalist theory will not be what supplants it, since I think people will want a logical theory that can be and is measured against reality. Any theory on human economies, however logical, that is divorced from real-world verification of its results is intellectual masturbation. You may as well develop your understanding of the (often even simpler) biology in the same manner.

 

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Thanks for the response.

The problem Hard Rain and myself have been having with Wizard, is that in debating him he refuses to actually deal with any of the arguments we make.

I ask him a question or I ask him to watch a video and give his critique in the forum, and he goes on to google, finds someone who doesn't like the austrians, or finds some quote that simply supports his position (Without refuting any points made by us) and then posts that as evidence that we're wrong.


He has come on to this forum, in the hope that the "scientific minds" here will back up his argument, which is just another appeal to "authority", the authority in this case being a bunch of anonymous guys/girls on a forum that has "sci" in the name.

You've come on here an atleast acknowledged, that which wizard refuses to acknowledge that the deductive method is simply another method, which IF DONE CORRECTLY has something to add, but you'ev also correctly stated the problems with that method.

A "valid" deductive argument, is not a logical argument. It is a logical argument from a "true" premise.

I think I know why the deductive argument fell out of favour, mainly because logic for the most part is common sense to a lot of people. "Logic" is not something necessarily one has to get a PHD in to use.

Back in the day of the scholastics, their knowledge of the world compared to now was limited. Their knowledge of science and experimentation was limited. And without the "knowledge" of that method, in order to make any argument, you are left with something that comes almost naturally, intuitive logic.

You correctly point out that "prediction" in economics is hoodoo. But understanding the effects of actions is not hoodoo.

What I mean by this, is that we can logically understand why increasing the minimum wage will, all else remaining the same, lead to higher levels of unemployement.

We do not need an experiment to tell us this. And people will argue, well if that is the case, then we can predict if we increase minimum wage that unemployement will rise.

No we cannot. Because in the REAL WORL, all those other variables that influence unemployement, change. So whilst we can use logic to understand the consequences of 1 simple action, since we don't know all the variables and we don't know ahead of time the exact effects of those variables (Because unlike rocks, human beings can change their mind), we cannot make accurate predictions.

At the end of the day, all economists use what they know, (E.G. the logic of increasing minimum wage, printing money etc.) and from their, they have to guess what all the unknowns might be, and often they use their gut/experience to argue they feel the effects of what they know, might have a more substantial effect than all the other variables, both known and unknown.

I think the misconception you highlighted with economics is because for someone reason people believe that learning economics can give the pre-cognitive abilities.

IT CANNOT. However, arguably, learning physics is different. We know about the gravity. I can predict with 100% certainty (In my mind) that tomorrow, I will not magically float in the sky. Gravity is a universal constant.

However, PEOPLE can change their mind. Where as we can predict what the effects of certain actions will be, we cannot know if people will indeed make those actions.

It is a fallacy to argue that economic modelling is a science. We are not modelling the climate. We are not modelling a bunch of known constants interjected with certain variables.

In economics, any model is basically trying to "guess" what actions people will take. And in the market, people are free to make any actions they choose.

Hell, we know, that printing money causes inflation. We can make reasonable assumptions that if people see their money rapidly losing value, they'll put their money in things such as gold.

However, what if people suddenly change their mind? The value of FIAT money is basically purely how much faith people have in it. People could change their minds tomorrow and all become "religious" and put faith in the value of the dollar.

In that case, you might find the dollar regaining some of its value. Does this observation refute the concept that printing money = inflation?

No it doesn't. The idea that printing money = inflation comes from the laws of supply and demand. When supply goes up, ceterus paribus, price falls. Since people started putting their faith in the dollar, demand has increased, ceterus paribus, the price increases.

No amount of observation can ever refute the law/concept of supply and demand. The idea that if we increase minimum wage, ceterus paribus, unemployement will increase, can never be refuted.

Even if the state does this and unemployement drops. This is because we can never isolate all the different variables and perform purely isolated experiments as we can in the physical sciences.

And because we can never perform the isolated experiments required by "the scientific method" in economics, how the hell can anyone argue, that the only valid method is empricism?

However you also fall into the trap of arguing for "observable" evidence of logical laws in order to verify it, some quasi logical-empiricism if you will.

A valid logical argument (True premise) does not require empirical observation.

1 + 1 = 2

Regardless of what you think you see or think you've observed, that is a deductive fact.

I don't need to measure every known triangle on a 2d plane to KNOW that all interior angles add up to 180 degrees. To argue that this theorem is untrue until we have sufficient evidence is nonsense.

 

Just to let others know, I have wild_cat on ignore and have had for a while in another forum. For reasons self evident in his post. After he called me a socialist for the nth time (Im a modern social liberal).. I just got bored of communicating with him directly. He really doesnt like that fact that I wont accept his faith based economics as I believe it lacks empirical evidence and vigor.

I [heart] evolutionary biology and the computer sciences. In those sciences I have learnt how to apply the scientific method to figuring out how real something is. Wild_Cats postings made me realize something was dodgy and the strange abuse of common definitions made me even more suspicious.

I kinda expect a reasonable human being to understand how the scientific method work, how its applied and why its so important to try get it right. Humans and logic can be fallible, so we do need to have a set of criteria to tell the difference between real science and pseudo-science.

While I do not know all the economic and philosophical terms I do know how to apply the scientific method and how important empirical evidence is. I felt it was misleading economics and I called it out.

I do realize that I am under equipped to deal with this type of wooh (most South Africans are.... its a weird euro import we have not had to deal with too much), so I invited Hard Rain here to have people better equipped to understand the double definitions and the deep interaction of philosophy and economics.

I have learnt a hellava lot in a short time

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Barrow concept from Stoni the Man that should have his face carved in Mount Rushmore . Quote: Only pussies use the ignore button . Sounds like the guy knows the economic law of supply and demand to Me . You can't refute it cause it is as basic as it gets . Most kids selling lemonade on the street corner understand supply and demand . You got to be a real back wood hill billy not to . There is also the basic law of diminishing returns were you have optimum performance for value . It is a bell curve for you mathematicians that want to understand how economics ties into the world of math . Modern life is all about amortizing so event center has a delay affect . You got blast and emigrant response ( meaning those not tied to the event ,< Spidies crawling all around the fruit giving plant, keeping the white fly off ) So we defer ,or as they say in tea party circles . Play kick the can . Kick the can has many meanings and they all fit in a perfect kind of way . I like kick the buckit bestes

Supply and demand is one of the hard laws of economics and if any denies that? might well try taking up brick laying

 

Do you know South Africa is as close to the source as you can get . You know about the meaning of the Great House of Stone . If you do please start a thread and I will be there in a heart beat . This mystery haunts Me very being . I know in my heart it is the true beginnings for the human race. Some would say it is my own conceit , but it is way more than that . You are the Beginnings. Your Country your soul . Please to meet you , hope you guess my name and whats troubling you is the nature of my game . Plastic finger of a white man you could say . Everybody of color knows the white Man is the Devil.

I learned a new one today . Me boots of Chinese plastic . How they good on Me . Me boots of Chinese plastic look good on me feet . Best to make something every body wants and has to have . Manufacture if you want to play the money game . Everything else is just talk . Get all the people addicted to the product and the financial part works it self out . Use good attorneys to cock block the competitors and you got it made . Governments are in a state of free fall if you ask Me . Governments as corporate entities them selves playing each as independent competitors in global economics . Or better said Fuck the little guy

 

Im all for supply and demand, Im also all for a government to regulate that business as I know business can not be trusted to regulate itself.

 

As you can see, instead of debating any arguments he bans people and claims victory without actually making an argument.

And for those of you who don't know why I labelled him a socialist because you are not familiar with our arguments in the other forum, he uses labels and fallacies himself. I got tired in trying to point out how he was making a fallicious argument, so to demonstrate why he was wrong I used his own tactic against him.

He argued that because the nutter Norwegian mentioned Mises (He mention that Mises critiques socialism and thats it) that "Austrians" sprout the same ideological nonsense as this Norwegian nutter.

An ad hominem attack on austrians using the fallacy of guilt by association.
I pointed out that as a welfarist, IE. using socialist policies, that I could do the same and argue he advocates what Lenin and Mao did. (He also used a link in his sig to a wiki page of "Liberalism" initially, which mentioned Mises. I tried to point out to Wizard that his link mentioned Mises and thus if Austrians were "guilty" because they were mentioned in the nutters manifesto then he is also "guilty" by association as well. Alas, instead of admitting he used a fallacious argument, Wizard here tried to sneakily change his sig and ignore me)

So you can understand the frustration of having a real debate with this oke. He uses fallacies, ignores arguments, and when his own fallacies are used against him in an effort to point them out, then only "those" other guys are the problem. Not him.

Peace.

 

Don't we love to play the blame game . Make your points and personal attacks can be reserved for me . Meaning I am the Attacker Hea .
Make your point s about economics would yeah or is this a thread about " scientific methodology he said she said blame game like Obama/Bush games of in and out like a sexual foreplay before climax . Get to your point man

 

What does the positivist-empiricist methodology tell you about love? Or kindness? Or longing? Or value?

You continuously miss the point that this philosophical impasse revolves around epistemology- the limitations of knowledge. Until you're ready to address and reconcile that matter, any claims you make against an alternative methodology are pointless.

But of course, trying to engage in discourse with a person who cannot recognize the inherent contradiction of saying: "I'm not dogmatic, but I only accept empiricism" is quite a futile exercise.

Thank you to the other posters who have engaged, and are willing to engage, with WilDCaT and myself. Thanks especially to Telemachus Rex; your response was very lucid and fair. Wildy has done a good job responding to you, but if I have anything else to contribute I will in due course.

 

Oh great, now we've got meta-defenses of Austrian kookery crawling out of the woordwork...

First of all, you need to stop confusing an anonymous internet forum with some kind of high school debate club.

The main thing to understand about the views in question, is that responding to them with rational critique gives them too much credit - implicitly elevates them to a position of peer respect, when they should be simply shown the door, and given a good hard kick in the pants to help them through it.

Again, this "rational debate" prototype doesn't apply here. Maybe google "blogsmanship" if you'd like to acquire a clue.

Yes it is.

Exactly: pseudo-science. "Not empirical" => "not science." It really is that simple.

Those are elements of philosophy, not science per se.

And yet, this doesn't seem to prevent any other social scientists from doing real science.

Yes, social science presents difficulties that natural sciences do not. No, this does not mean that real science can't be done in those areas.

 

/snort

"Automatically?"

That's what "science" is, in the relevant context.

Which dictionary?

Here's what Wikipedia says:

"Science is a systematic enterprise that builds and organizes knowledge in the form of testable explanations and predictions about the universe."

There is of course the older Aristotalian connotation, but that isn't relevant here. We're talking about "the scientific method," and not "any form of rational explanation whatsoever."

I have no issues whatsoever with excluding "mathematics" from "science" entirely. Math is a language used for conveying certain ideas. It is not, in and of itself, a form of science, any more than English is.

Exactly - "proof" of that nature is for mathemeticians and philosophers.

Yep. Was there supposed to be a criticism, or drawback to science, visible in there somewhere?

Your objection seems to come down to the complaint that science doesn't traffic in the sort of epistimological absolutes that you demand. Except, that's a problem with you, and not with science.

And, like "2+2," it may or may not actually apply to anything in the real world. It's nothing more than a formal statement of relations between abstract entities, floating in empty air. To actually connect it to anything real, you have to do science - figure out whether that connection was valid or not, via experiemnt.

An appeal to authority is an argument.

If you want to argue that said argument was fallacious, you're going to need to do more than simply identify that it is indeed an argument from authority.

But let's note that the argument being made didn't particularly depend on the authorities cited - it was an observation that disdain for Austrian "thought" spans the political spectrum, using widely-respected examples from opposites political camps to illustrate.

And observing such is not a rhetorical counter to that - you don't even question the applicability of the metaphor. Which silence I assert is tantamount to consent. And so you should have remained silent, rather than present this cheap display of evasion.

That's great and all - and I'd be happy to apply such a perspective, if y'all charlatans would stop misrepresenting yourselves as scientists, and if the whole enterprise hadn't so blatantly descended into a cover for politicized interests. This is not a domain of abstract philosophy, and you're persistence in pretending it is simply works to provide further cover for craven political interests. Hence the coordinated astroturfing of this forum, in this thread.

 

That is not completely correct. You can statistically control for various possible influences and determine within a specified confidence interval the degree to which a potential factor is an actual factor in real world situations and the relative magnitude of the influence. You can take a single confusing jumbled signal, and using math, figure out precisely what elements were combines to form it.

Your data may be flawed in any given case, but over time you would build a picture that suggests the real relationships hidden in the data.

It is definitely clear to me, in any event (subjectively speaking, of course), that if you raise the minimum wage 100x, and unemployment holds steady 100x, then you should consider whether the premises are correct that led you to the conclusion that unemployment should increase. Or perhaps not 100 times, perhaps 1000. At some point, though, if your theory is being constantly shown to not apply in the real world, then you need to be a madman to not have any doubt that you're correct.

In my experience, Austrians love prediction, it's just that they predict "Disaster!" for any given welfare state policy. (The same is true of many non-Austrians as well, like the famed Nouriel Roubini.) In recent years, they have looked prophetic, but they were making similar claims for decades before that and not always looking quite so good.

As I was saying, Austrians make mistakes in making their premises far too oversimplified, and then draw logical conclusions that may not be valid because of the oversimplification. Orthodox economists do the same thing often, as when everyone assumes that humans are rational, despite the growing evidence that that is, at best, a rough guideline and that many humans behave provably irrationally much of the time. The curious thing is that Austrians recognize the problem when other economists use math to describe a complex world, but not when they themselves use an even less rigorous logical process to do the same thing.

The problem is, that the premises can seem "obviously true" to the people who think them up. Without testing of hypothesis there is no feedback mechanism to alert you that your views of what is "obvious" and "true" may be idiosyncratic or limited to people who happen to hold philosophical positions similar to your own, or that they may simply be insufficiently nuanced to account for all the variations present in the real world. (There are any number of psychological biases that we are all subject to that can lead to a heartfelt misperception of such "truths.") Unless you can prove the truth in some objective manner, direct or indirect, any premise you use is subject to your simply being wrong, by a large or small margin.

I'd rather have a logically questionable system that, based on the results it produces, is clearly useful in describing behavior in the real world, than a intuitive and logical system that bears no demonstrable relation to the real world. If you believe game theory (which should be any Austrian's favorite branch of mathematics), every game of checkers is decided before the players move a piece, it should end in a draw. That checkers has been solved for game theoretical purposes and that two rational players should therefore always end the game in a draw is not what you really see in actual games.

The repeated hawk-dove game provides another example. The rules are simple and the naive conclusion one can draw from the game is that doves get defeated by hawks, and therefore hawks dominate doves in any evolutionarily stable strategy. If you actually use that game and its simply, intuitive and seemingly correct premises to analyze behavior in nature, you see that doves and other non-combative creatures continue to exist, and the game itself leads to wildly wrong predictions about the relative populations of aggressive species to passive ones. It's understandable, because the game is too simple to model real biological behavior. That's true whether you use mathematical logic or logic in its less rigorous form.

But whether you call it a mathematical model, "game" or syllogism is irrelevant, because each is basically the same thing: a series of premises from which conclusions are logically drawn. The big difference between a model and praxeology, is that models are more complex and their creators more careful to state all of their assumptions.

The great sin of orthodox economics, imo, is that they test their models against reality too infrequently. Like Austrians, they simply prefer to believe their model describes the real world, so they assume thatit does, because the logic is impeccable.

 

Fantastic responses. I keep learning in this thread

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Once again thanks for the response and attempt at debate. It is appreciated.

I agree that we can make statistical probabilities, I agree with the idea of trying to make models, however there is a reason why economic models often fail to reflect the FUNDEMENTAL REALITY OF THE ECONOMY.

First of all, all models (Even climate models) are simplified version of reality. However, the physical world is very consistant and because of this the past can be used to predict the future using probability.

Now all models in economics, like physics are based on historical data. But human beings can change their mind, hell the very fact that someone might have decided X in the past, might mean that because they have already tried X, that in future they are likely to try Y or Z.

In other words, the past is not reflective of the future. The consistancy is not there. Basically I'm not just saying the economic models are simplified version of reality, they are hyper-hyper simplified versions of reality that use assumptions that are known to be false, but if we don't use those false assumptions we wouldn't be able to do a model. So we model the false assumptions.

E.G. The theory of perfect competition and equilibrium price is not reflective of reality, it is a false assumption, yet we need to make this assumption in order to make a model.

So we know we use false assumptions, and people still wonder how the economic models cannot predict/demonstrate MAJOR defects in the economy, I.E. impending recessions?

I agree that from massive amounts of data we can gather it and from the data decide to form relationships. That is correct, but we can understand relationships logically as well, such as the example of minimum and unemployement. But we cannot know what decisions people will take.

I.E. We can dicern the effects of action A or B, but we cannot know if action A or B will take place. I think this is fundementally different from the physical world as the forces of the physical world, such as gravity are always in force and have an effect.

A logical proposition, based on a true premise, is true. It cannot be false. I know it sounds absurd that any "evidence" you find to contradict the idea, doesn't in fact contradict the idea but it is like the following statement.

"Any statement, cannot both be true and not true at the same time."
(You would have to understand the real dichotomy of true and untrue as opposed to the false dichotomy of true and false)

Once you demonstrate a true premise and a logical following from it, you have reached a conclusion that is true.

The statement, that increasing minimum wage 100X, ceterus paribus, is TRUE and is applicable to the real world.

I agree that many statements or definitions are not applicable to the real world, E.G. the rational person or perfect information, but this critique is a critique Austrians often give for mainstream views and try to avoid themselves.

I don't know how you can argue that austrian theory is not applicable to the real world.

If the subjective theory of value is true, then any policy of intervention on the basis that "wealth of society" is enhanced is wrong. It should not be done.

How is that not applicable to the real world? I'm sure there are conclusions in Austrians that are not really applicable, they are not perfect but they are far better than other schools in understanding the limitations of what they do.

 

Agreed. I'll be sad to see it end.

The new Austrians I've read, admitted ideological zealots, predicted the bursting of ".com" bubble, 9/11 and the housing crash. Naturally the Global Bailout Bubble has them jumping up and down shooting fireworks out of their eyeballs. It's seen as the Motherload that has a 99.9% likelihood of forcing a deep depression and monetary upheaval.
It's not difficult to see why this view is gaining considerable attention from the millions of disenfranchised workers.

Being financial advisers as well, it's disturbing that one of the preferred courses of action to safeguard one's money seems to be buying stock in the defense industries....a little too much logic for me to handle there.

 

The future does reflect the past . That was a false statement . People with old ideals hold on to them with a death grip . They do the same thing as the past by the past Ideology they live by . Hells bells anyway " When you look in the mirror and see your self you are looking at a reflection of the past . How ever so small the difference is between actual time and what you see in the mirror is still behind that very future . You look at the past when you look in the mirror . We already proved that on this forum . Check out the Free will is an Illusion thread we gots if you want your mind blown . Might change your whole out look on life .

 

Wait - demanding that economic models match actual real-world behavior?

What are, some kind of empiricist?

No, that just means you have to be a bit more careful in figuring out which parts of the past are predictive of which parts of the future. Just like in all of the social sciences. It isn't easy, but it can be done.

People, in the aggregate, are remarkably consistent about fundamental, big-picture things like responding to incentives. People, as a whole, aren't going to suddenly change their minds about wanting more purchasing power, for example.

That's just as true in the physical sciences. Newtonian mechanics is known to be false. And yet, we're able to use it to great effect, all over the place, exactly because we have an idea of where it is and is not a reasonable approximation of reality.

A general property of all scientific theories is that they are, ultimately, false. Scientific progress consists of figuring out where they fail, patching those issues, and then repeating the process indefinitely. There is no Ultimate True Theory that is ever attained - just an ever-improving sequence of theories with fewer and fewer flaws.

Who wonders about that, exactly? Talking weasels?

The business cycle is a very well-studied phenomenon in economics, and the reasons for its unpredictability are clearly expressed by the prevailing theories: if such events could actually be predicted, the market would necessarily compensate and so avoid them. Thus, they can only occur in an unpredictable fashion - in terms of timing, anyway. It's easy enough to predict that a bust is going to occur at some point (and this is essentially always done - it was no secret that the housing market would eventually burst, as far back as 2004. Just nobody could be sure exactly when, and so the incentive in the meantime is to try to cash in and get out before the bust).

Nor can we know in advance which outcome will occur in a quantum physics situation. We can only provide probability distributions for such. This doesn't seem to prevent any problem in the physical sciences, so what's different here?

There's plenty of unpredictable randomness in the physical world. There is also plenty of chaos - which, although purely deterministic, is essentially unpredictable.

And you can never establish whether any particular premise is, ultimately, "true" in any scientific sense. You can only engage in philosophical musings on the basis of axioms accepted without any deeper support.

It is impossible, even in principle, to ever "demonstrate" that any premise is "true."

No it isn't. There has never been any instance, anywhere, of the minimum wage being increased by such a factor, and there is no chance that such will ever occur anywhere in the future. What you are addressing there is exactly a fantasy world, with no relevance to the real world.

Except they don't avoid that issue by sticking solely to statements that are perfectly applicable to the real world (such a thing can't even exist, in principle). Instead, they reject the whole criterion of applicability to the real world as such (that being exactly what "empiricism" and "the scientific method" consist of), and instead content themselves to deal in abstract philosophical terms without any constraints of reality.

I don't know how you can aruge otherwise, given the open rejection of empiricism and the scientific method. That's an explicit abdication of any hard relevance to the real world. You're into the realm of abstract philosophy here, not science.

Doesn't follow - as long as the policy ends up increasing the total subjective value, then there's no issue. What do you imagine that you're arguing, there?

For starters, because it's nonsense that isn't applicable to anything.

Except that all the Austrians on display here, are exhibiting massive blind spots as to the limitations of what they are advocating.

 

While I think there is a lot of truth in that, I don't think the general criticism is any less true for a model spelled out using words than it is for a model spelled out using math. The mathematical models of most modern economists are fundamentally flawed, be they DSGE, ACE models, etc. You can tell their flawed because they tell us so very little about the actual economy that is of any practical use. They purport to tell us things, but the primary lesson is "do not rely on these models."

That said, there are no better insights to be had in all the written words of all the Austrian economists either, imo, for the same reasons. All the models purport to provide insights into the economy, but they really don't provide any that are useful.

The best of them do at times seem to match a certain reality in certain ways, but usually only in the sense of having a certain verisimilitude about their results. On the rare occasion these models make an accurate prediction that seems to relate to the real economy, the success is generally fleeting and not repeated.

Now, I am understating some of the usefulness of these models, as there are certain things they can describe reasonably well, and seemingly accurately, but those things are usually uncontroversial and all of the non-crackpot models reach similar conclusions on those points. (For example, if you print money with an increasing frequency, inflation will result.)

I like to think, in the fullness of time, we will eventually find a description of the economy that actually comports with reality. I have no idea how to measure our progress in that regard except by way of statistical comparison of the results of the model and those of the real economy.

I also think that any coherent concept that can be explained in words, can be explained in words and math combined, as mathematics is just a language for efficiently describing logical relationships. The reason why math is a good thing, in all fields, is that math is so much more precise than traditional languages.

Uncertainties and squishiness that hide in a book length, English-language description of economics have a harder time surviving the more rigorous treatment they are given in mathematical form, but I maintain using math doesn't force any greater degree of simplification than using natural language. It may appear as if it does, because you are making simplifying assumptions like assuming there is one agent whose tastes serve as a proxy for all consumers. That appearance is only apparent however, because the reason for the simplifying assumption is that the math is so much harder without it...the flaw the non-mathematical economists make is not that they are skipping the simplification, but rather that their models are so vague and indistinct that they don't even see (and therefore never really address) why a simplification is needed to puzzle out the logical consequences of their own theories. Put another way, when you need a simplification to make the math work...what that is really saying is that you need it to make it possible for one to work out the logical implications of a given situation.

The glory of math is it forces you to be hyper-precise in your logic. Any natural language theory that can't be translated into it, is very likely just not precise enough in its own logic to survive the translation intact. Math and logic are, as I'm sure you'd agree, not separate things, math is just a way of speaking in a very logical way.

Sorry if I am being repetitive, I've been operating on an average of 2 hours of sleep for the past two weeks...ugh, work.