RoR: Forum

Fred went on to say, "There can be differences of scientific theories which can both be workable, but that isn't the case with incompatible economic debate.

It's not as if the competing economic theories were complementary theories, alternative expressions of some deeper truths. Freedom and totalitarianism are incompatible paradigms. On issues determined by too much or too little of either, we can't equally pursue 'both' as a workable path, but rather, a balance between the two."
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The problem goes further than that. What does "Economics" purport to measure? Where are its boundaries? What is its foundation? What are the components? What are the economic agents?

Don't get me wrong, I believe in economics as a field of study that should be useful. But I'm not happy with what I see so far - it is much like psychology, like all of the social sciences, a mess.

There should be a political economics - a field that demonstrates why Capitalism produces wealth and other systems don't. And there should be an applied economics that attempts to describe economic behaviors under specified conditions. But right now, the best we have is not adequate in many areas. That much is clear to a complete amateur like myself.
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Ayn Rand has given us the clearest exposition of where wealth is created - in the human mind. But try to find any aspect of that simple truth in any of the economic theories. And what comes from the mind does so out of motivation, but that is a variable I don't see in any of the formulas. They don't talk about choosing or emotions or how we value things. And maybe that is properly left to moral philosophy and to psychology. But if that is so, economics needs to point at which underlying theories are being used - what is meant by value, what psychological theories are assumed, what are the epistemological theories used?

Professor Mises wrote in Human Action, page 63, "It will be shown at a later state of our investigation that the distinction between 'economic' and 'non-economic' motives of human action is untenable."

Then on page 231 he elaborates. Saying that economics will become "...fully developed, a system dealing with all human choices, a general theory of action."

He is claiming large areas he hasn't fleshed out, nor has he explained why he is tossing out epistemology, moral philosophy, and psychology.
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Jane Jacobs makes a convincing argument that cities (and their surrounding environs) are the most reasonable place to draw a boundary around an economic system - not nations. We have cities that are vibrant, alive, and growing, while others - in the same nation - even whole regions are dead - rust belts.

But it appears that the development of economic theory is really about creating generalities that will so effectively average out any differences that it gives an appearance of accurately representing any abstraction with one hand, while ignoring the fact that the other hand is brushing away any outliers that would show the number to be meaningless.
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Then there is the business of micro versus macro. Reisman (Capitalism, page 57) talks about the problems of dividing economics into micro versus macro and the theoretical errors (theory of "partial equilibrium") that occured when this was started by Marshall (and followed by Keynes). But I see the same kind of error commited in some applications of Austrian and Classical economics when they extrapolate from the individual to "the economy."
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All of the economic systems seem to put the weight behind consumption, yet it is impossible to consume prior to producing.
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On the methodology of economic modeling: They appear to be mostly, if not all equilibrium-based models, yet there is no equilibrium in real life. And these math models are terribly suspect since basic questions are still in dispute, yet there they sit, implying answers that you get to round to whatever decimal point suits your fancy.

Reisman states, "...no such equation can possibly hold up in the face of changes in the fundamental economic data. New goods are introduced. People's ideas and valuations change. Their real incomes change. Population changes. The belief that an equation could be constructed that would take such changes into account is totally opposed to reality. It is tantamount to a belief in fatalistic determinism and implies, in effect, that a mathematical economist can gain access to a book in which all things past, present, and future are written and then derive from it the corresponding equation. Whatever it may be, such a view is definitely not within the scientific spirit." Capitalism, page 59.

He is right. Economists can not tell us if the interest rates will go up next month, or down. And they don't agree with one another on what makes the interest rates move. They should set aside tweaking of mathematical models till they can get their foundations in order.
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I hope this post will open up a discussion on what economics should be and where it falls short - in the most basic, fundamental terms - because those are what are needed.

Post 1

Monday, July 5, 2010 - 7:36pm

Steve, I really don't find it valuable to argue with someone who is so ignorant, and yet claims to be able to make very strong evaluations of economics. This is a real problem. If you approach this by saying you don't really understand, and you have some questions, we could answer some and refer you to other sources for more details. But instead, you've made a series of bold and confused assertions and identified issues that are not real issues.

I hope this post will open up a discussion on what economics should be and where it falls short - in the most basic, fundamental terms - because those are what are needed.

Maybe it'll open up debate, but I don't think it will open up discussion. Nearly everything you said is either flawed itself or makes assumptions that are flawed. For instance, Austrians have already and clearly rejected economic modeling. Similarly, economics have long recognized that production is necessary for consumption (see Say's Law). And Mises made it very clear why he ignored psychology and moral philosophy (he didn't ignore epistemology...in fact his student, Hayek, is famous for pointing out how the market serves an epistemological purpose).

I could just as easily write a post about how philosophy is worthless, even though it should be valuable. I could talk about how people believe emotions are the source of knowledge, or that pleasure is the criteria for moral action. I could talk about how philosophy should draw some line between morality and the physical sciences. I could complain how philosophers are always trying to use mathematic equations to explain why people act the way they do, and how the math is clearly flawed.

And I could accuse philosophy as being one giant rationalization for what people want to do politically. So of course, I rephrase the initial quote:

Philosophical debate is simply a projection of political debate; it is not scientific debate. It is political debate between two irreconcilable points of view. That isn't demonstrable science, it is simply wrestling.

For those who think discussing economics is simply wrestling to promote your own emotional perspective, don't expect me to adopt your premise and hop in the mud!

Post 2

Monday, July 5, 2010 - 10:34pm

Joe,

I won't continue a discussion with you when your opening remark is that I'm ignorant. Try to imagine yourself on the receiving end of a remark like that and perhaps you'll understand how it sours the entire process for me.

I have discussed psychology and software development and sailing with people who don't have any depth in those fields, and at other times I've simply elected not to enter the discussion in the first place. But I don't remember ever declining a discussion by stating that they were too ignorant to deserve any of my time, or that they were so ignorant that I couldn't decide how to proceed.

My comments on economic modeling have to with the fact that it is the fastest growing of the economic processes in academia, that it is in use in many of the schools, that it is used to drive the current political decisions made in Washington, and I quoted Reisman in my objection to economic modeling so I am quite clear that he and the Austrians are in disagreement with it.

It is the 'leading' economists in our culture who are calling for more consumption. I didn't say that the Austrian school needed to be reminded of Say's law.
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You'll pardon me for not continuing our discussion. I'm feeling overwhelmed by the desire to not fight your perceptions of my ignorance.

Post 3

Tuesday, July 6, 2010 - 12:25am

Steve,

Debates happen because both sides think they are right about a position. So disagreement is expected. The problem with ignorance in a debate comes when you claim to speak for the other side of the debate. In this case, you feel that you can make assertions about what economists believe and what economic theory states. Then, instead of us debating whether you are right or wrong on a position, you turn it into a debate about what other people think. It's like someone hopping on here saying that Rand was in favor of butchering children. How would you respond to that? If they were arguing that it was in your self-interest to butcher children, you could argue. But since they're only arguing about what someone else thinks, all you can do is say they don't know what their talking about and provide a few examples. Well, you're doing the same thing. And I've told you that you don't know what you're talking about and I've provided examples.

Of course, you've also continued to lump in the worst Keynesians with the Austrians, and say that they're all flawed because the Keynesians are. If you were serious about a discussion of economics, that's a bad approach. You can't say that all economics is flawed by pointing to the worst ideas that are already rejected by others, which is exactly what you did.

Shall I tell you that all Psychology is flawed and not scientific? I knew a couple who went to marriage counseling and their "therapist" gave them massages, because all past problems stick around as stress, and rubbing away the pain will rub away the conflicts. Just try to convince me that some of it is scientific, and I'll come up with another ridiculous point made by someone you completely disagree with. Think about that for awhile. Think about how pointless the debate would be. Even where you said you disagreed, I'd simply point to that disagreement as a sign of how it's clearly not scientific. And I'd suggest that unless you could explain every single human being's actions during the entire Great Depression, it clearly isn't a science. And on and on I'd go, with no intention of ever understanding anything.

Does that sound useful?

Post 4

Wednesday, July 7, 2010 - 2:42pm

Steve,

It has become painfully clear to me from our past discussions that you don't understand some very fundamental aspects of economic theory. Yet you persist in criticizing the discipline from a position of relative ignorance. You need to learn more about the subject before speculating on its merits and demerits. Furthermore, in certain cases, your objections are so vague and seemingly misguided that I have no idea what your point is or what it is that you're criticizing. Nevertheless, I will try to respond to some of your remarks. You ask,

What does "Economics" purport to measure? Where are its boundaries? What is its foundation? What are the components? What are the economic agents?

Are these rhetorical questions, or are you being serious, because these can be answered in any beginning economics textbook? Take a course in the subject and learn something about it!

There should be a political economics - a field that demonstrates why Capitalism produces wealth and other systems don't.

There is! It's called "Comparative Economic Systems." And even contemporary neoclassical economics recognizes that capitalism is more productive that socialism.

And there should be an applied economics that attempts to describe economic behaviors under specified conditions.

There is! It's a principal part of standard micro- and macro-economics, e.g., how price controls create surpluses and shortages, how increasing the money supply causes price inflation, etc.

But right now, the best we have is not adequate in many areas. That much is clear to a complete amateur like myself.

Well, perhaps a complete amateur like yourself can enlighten the professionals. I'm sure they'd love to hear your admittedly amateurish explanation of what is wrong with their discipline. :-/

Ayn Rand has given us the clearest exposition of where wealth is created - in the human mind. But try to find any aspect of that simple truth in any of the economic theories. And what comes from the mind does so out of motivation, but that is a variable I don't see in any of the formulas.

Oh, come on! Economics doesn't recognize the importance of motivation?!? Of course, it does. It specifically addresses incentives for finding employment, saving money and investing in new enterprises. How does that not acknowledge the importance of motivation?

They don't talk about choosing or emotions or how we value things.

Yes, they do! Ever heard of diminishing marginal utility? And, as previously stated, there is an extensive discussion of the various influences on demand and supply -- on the choices to buy and sell in the marketplace. Economic theory also specifies that demand depends on two conditions -- the willingness and ability to buy a product at a given price. If either of these conditions is absent, there will be no demand for the product.

Professor Mises wrote in Human Action, page 63, "It will be shown at a later state of our investigation that the distinction between 'economic' and 'non-economic' motives of human action is untenable."

Then on page 231 he elaborates. Saying that economics will become "...fully developed, a system dealing with all human choices, a general theory of action."

He is claiming large areas he hasn't fleshed out, nor has he explained why he is tossing out epistemology, moral philosophy, and psychology.

Well, you haven't "fleshed out" your objections either, so I wouldn't go pointing fingers at von Mises, even assuming that what you say is correct. :-)

Jane Jacobs makes a convincing argument that cities (and their surrounding environs) are the most reasonable place to draw a boundary around an economic system - not nations. We have cities that are vibrant, alive, and growing, while others - in the same nation - even whole regions are dead - rust belts.

Apparently, Jane Jacobs doesn't know economics any better than you do. Economic theory doesn't confine itself to geographical boundaries; It doesn't specify different economic systems for different societies. It addresses productive activity and economic exchange wherever it occurs, and does so in relation to man qua man, not simply in relation to man qua citizen of this society or that.

But it appears that the development of economic theory is really about creating generalities that will so effectively average out any differences that it gives an appearance of accurately representing any abstraction with one hand, while ignoring the fact that the other hand is brushing away any outliers that would show the number to be meaningless.

Yes, economics deals in generalities; so does any science. It is certainly true that mainstream macroeconomics lumps capital and labor together without distinguishing among different stages of production, but Austrian economics doesn't make that mistake. I don't understand the rest of your statement about brushing away outliers.

Then there is the business of micro versus macro. Reisman (Capitalism, page 57) talks about the problems of dividing economics into micro versus macro and the theoretical errors (theory of "partial equilibrium") that occured when this was started by Marshall (and followed by Keynes). But I see the same kind of error commited in some applications of Austrian and Classical economics when they extrapolate from the individual to "the economy."

Please explain this statement. How does Austrian or Classical economics err in extrapolating from the individual to the collective? Are you referring to methodological individualism -- to the explanation of collective action in terms of rational, utility maximizing individuals? If so, what's wrong with that?

All of the economic systems seem to put the weight behind consumption, yet it is impossible to consume prior to producing.

ALL of the economic systems do this?? No they don't. Austrian economics doesn't, for it recognizes the importance of saving and prior production for increasing people's ability to consume. And Classical economics doesn't as it recognizes Say's law, which states that in order to consume an economic product one must first produce something in exchange for it -- that one must bring one's production (or its equivalent) to market in order to purchase consumption. James Mill's essay "On the Overproduction and Underconsumption Fallacies" is another exposition of that law. James Mill (the father of John Stuart Mill) was arguably the better proponent of that law than Say was. So, both Austrian and Classical economics put the weight behind production not behind consumption. (Bolded portion added later.)

On the methodology of economic modeling: They appear to be mostly, if not all equilibrium-based models, yet there is no equilibrium in real life. And these math models are terribly suspect since basic questions are still in dispute, yet there they sit, implying answers that you get to round to whatever decimal point suits your fancy.

Austrian economics recognizes the difference between comparative statics and dynamic market processes, even if mainstream neoclassical analysis doesn't (or doesn't to a sufficient degree). But graphical presentations of equilibrium analysis do serve a useful purpose even in a study of dynamic market process a la the Austrian school, because it shows the equilibrium toward which the market is headed, even if that state is never fully realized in an ever-changing economy. This is not to deny that the static models, if taken literally, can be misleading and result in incorrect conclusions. Austrian economics also uses a model called "the evenly rotating economy," in which there is no actual increase in wealth, in order to explain an expanding economy.

Reisman states, "...no such equation can possibly hold up in the face of changes in the fundamental economic data. New goods are introduced. People's ideas and valuations change. Their real incomes change. Population changes. The belief that an equation could be constructed that would take such changes into account is totally opposed to reality. It is tantamount to a belief in fatalistic determinism and implies, in effect, that a mathematical economist can gain access to a book in which all things past, present, and future are written and then derive from it the corresponding equation. Whatever it may be, such a view is definitely not within the scientific spirit." Capitalism, page 59.

Sure, but even Reisman uses graphical equilibrium analysis to illustrate his ideas.

He is right. Economists can not tell us if the interest rates will go up next month, or down. And they don't agree with one another on what makes the interest rates move.

All you're saying here is that there is disagreement in economics. Is that news to anyone? What economists can say, however, is that ceteris paribus, if the supply of credit increases sufficiently relative to the demand for it, then interest rates will fall. To be sure, this is a conditional prediction, but it is a prediction nonetheless. Moreover, it has become standard practice for the central bank to buy T-bills during a recession in order to lower the federal funds rate, so economists can reasonably predict that this will occur in an economic downturn.

(Edited by William Dwyer on 7/07, 2:48pm)

(Edited by William Dwyer on 7/07, 4:59pm)

Post 5

Wednesday, July 7, 2010 - 4:51pm

Bill,

I've lost all interest in pursuing this discussion.

Joe has decided that I'm too ignorant in the subject to justify the waste of his time. Well, we've all had the experience of reading someone that doesn't know as much or doesn't think as clearly in a given subject. When I am reading a post from that position, I decide to answer the post or not. But I don't make the subject of my post an opinion about the other person's ignorance.

The topics that I wanted to discuss went beyond the minor issue of how emotions are measured when they deviate from the norm due to an exceptional nation-wide event, and beyond understanding current structuring of the discipline (which I could easily look up in my Economics textbooks or at Wikipedia), but to the issues that Rand and Reisman were trying to address where they each found disagreements with Austrian Economics. I was not attempting to put down Professor Mise. Rand had great respect for him, and Reisman practically worships him.

You have suggested that I go take an economics course, implying that I haven't, implying that I haven't read in the subject. You chose to make me the subject of your post. Usually you are respectful and focused on the issues and write in a way that encourages people to explore an issue deeper - all the while being logical. I've seen you work hard to draw out what the other person was saying until you could be confident that you understood them. Not this time.

Your long, tiger-striped post was more about making debating points, and cutting me down then attempting to find out what I was getting at. To me it reads like one long strawman argument where your misunderstanding of what I was trying to say was used to make me look ignorant and for that to be the strawman.

I'm just not interested in continuing this discussion. For whatever reason, all of the heart has been knocked out of me.

Post 6

Wednesday, July 7, 2010 - 5:22pm

Steve,

I'm sorry if I was a little hard on you. But I just got tired of your presumptuousness in leveling criticisms against a subject of which you don't understand even the basics. I mean, where is the legitimacy in that? I was astonished and bewildered at some of your comments. They were so off the mark.

Instead of complaining about how unfair Joe and I have treated you, why don't you try to understand why we have responded the way we have, and ask yourself if there's any truth in what we're saying?

Lately, I find that your arguments exhibit less and less logical rigor -- that they're just tossed out off the top of your head without adequate knowledge or careful consideration, which also makes them difficult to follow and address.

If, after reading our posts, you still think there's merit in any of the points you raised, by all means say so, but try to support your objections with specific examples. In many cases, your allegations are simply too general and too vague for me to know what it is you're getting at.

Post 7

Wednesday, July 7, 2010 - 6:13pm

Bill,

I'm done on this topic.

I know what I wanted to bring up in hopes of exploring and I know there is some good material to work on, but I'm not going to subject myself to attacks just to try to bring a topic up.

Even your apology was more of an attack on me than an apology.

If somebody wants to discuss the foundations of economics, I'd suggest they look at the issues that had Rand upset in her Marginalia, and the items that Reisman chose to modify in his adoption of Austrian Economics (somewhere near pages 50-60 if I remember right) - after that, it only requires that one not demand that Austrian Economics be seen as perfect and complete.

Post 8

Wednesday, July 7, 2010 - 6:43pm

In my job as an engineer, the topic of incompetence has come up frequently. There are two distinct concepts used. One is the general idea of someone who is not qualified to do a job. I prefer the term "unqualified" for that concept, because incompetent has a very negative connotation. The other concept is one that I point out frequently. It's when someone is unqualified to do a job, but they think they are qualified.

There's a world of difference between these kinds of people. An unqualified person who recognizes they are unqualified will take additional steps to compensate. They'll study, ask questions, have design reviews, and take criticisms as a way to grow and learn. They'll be careful about making assumptions. They'll be quicker to ask for help and to try to reduce risk. They aren't irrational. They are just lacking some critical information or skills at the moment. Yes, they may be unqualified, but there's some ways to at least partially compensate.

On the other hand, the unqualified individuals who thinks he is qualified is a disaster. He dismisses criticisms, refuses to take advice, is resistant to facts, doesn't ask for help, and does nothing to reduce risk. He's going to do it wrong because he thinks he's right. There's no reaching him because he's delusional, and his delusion is almost certainly tied to his self-esteem (it is a delusion of his capabilities). He'll resist any attempts to compensate for the damage he's doing. As long as he believes he's qualified to do the job, anything you do will be seen as getting in his way.

The same kind of distinction could be made with the word "ignorant". We have the general concept that someone just doesn't know certain things. And we have the worse subset of those who don't know, but think they do. I don't have a particular problem with ignorance when you recognize it. If you want to learn and don't know anything, that's fine. If you want to discuss a topic without knowing almost anything, that can also be fine. That's because if someone corrects you, you'll be willing to incorporate the new information into your understanding. You may still have concerns and disagreements, but your concerns are with the other person's points.

The problem with the ignorant debater who doesn't know it is that they spend their time "informing" you of what the facts are, and defining both sides of the debate on their own terms. For those who come here to argue against Ayn Rand without knowing anything, they spend their time telling us what she thought and why it is wrong. If you try to correct them, they are dismissive. They already "know" the "facts". They are only interested in arguing the merits of the ideas, not the content. They can't accept that they have something to learn, or that they have misconceptions of the facts themselves. And they don't want anyone else pointing it out. They want everyone to accept their "understanding" of the facts, and start debating.

So while it may be useful to debate/discuss a topic with someone who simply doesn't know the facts, but recognizes it, it is not useful to debate with the people who are certain they know the facts and don't. You can spend a long time pointing out every fact they've gotten wrong, if you have the patience and don't mind failure. The fact is that they're not here to learn or correct their mistakes. Maybe by showing them how ignorant they are they may realize it and decide to learn. But until then, they'll just resent you telling them every statement they make is incorrect or based on an incorrect assumption.

Steve, I pointed out your ignorance to identify that no real discussion can happen while you think you are informed enough to state what other people's positions are. As I said in the first post of this thread, this is a real problem! You make claims that just aren't true about other people's positions, you attribute positions of some people to those who vehemently disagree with them, you argue that people haven't addressed issues that they have clearly and relentlessly address, and you make sweeping arguments about the legitimacy of economics based on faulty criteria that at least some economists have explicitly rejected. And even though you don't know what you're talking about, you get angry that someone tells you that you don't know what you're talking about.

If you ever get serious about discussing this topic, maybe we can go from there. But while you insist on making sweeping attacks that are not only unsupported, but also outright false, I don't think you have and grounds for getting upset. The people who have grounds for getting upset are those that have spent serious time (sometimes their entire lives) learning, understanding, clarifying, and making serious progress in our understanding of the world, who's entire contributions are swept aside by someone who didn't even bother to learn the facts before they casually dismissed it all and claimed superiority. And you have insulted all of us who have learned and taken the time to appreciate the genius of those contributions.

If you want to talk about who should be offended in this thread, it's all of the great people you've cavalierly dismissed without bothering to get your facts straight.

Post 9

Wednesday, July 7, 2010 - 8:05pm

Joe,

We disagree on many, many points. I believe you misunderstood much of what I wrote and then attacked me based upon the misunderstandings. But I'm not going to do one of those tiger-striped replies pointing out each of the areas where you falsely accused me of this or that based upon misunderstandings. I just have no more interest in this subject - at least not now and not here. There is no point to continuing the discussion.

Post 10

Thursday, July 8, 2010 - 4:17am

JR: The same kind of distinction could be made with the word "ignorant". We have the general concept that someone just doesn't know certain things. And we have the worse subset of those who don't know, but think they do. I don't have a particular problem with ignorance when you recognize it.

Not related to this immediately, I just wanted to share a learning moment of my own. It was 1984. I was working on a database project at Oldsmobile. The platform was somewhat complicated, microcomputers running machinery and the micros networked to minis in a cluster and the whole thing written in Fortran. I was working with a good old boy from Tennessee who had been with some of this technology for other big projects. He had the pictures in his head. At some point, I was not being successful, missing not just the timelines but the conceptual target. So, Randy sat down with me and we talked out the big picture. He said emphatically, "The only problem is that you're ignorant." I startled at that. I was taken aback. He rolled his chair back a little bit and said, "I see how you took that. All I meant was that ignorance is curable." Everything went well from there.

(Edited by Michael E. Marotta on 7/08, 4:18am)

Post 11

Thursday, July 8, 2010 - 11:21am

Joe and Bill, I respectfully would like to disagree with your harsh criticism of Steve's thread (which I sanctioned, along with his post 0). I think the underlying point Steve is trying to make is that contemporary economic discussions often are between two camps who start out with fundamentally irreconciliable premises -- those in the Objectivist / Austrian / libertarian / individualist / free market camps, who hold that individuals have self-ownership, which has implications for their right to retain everything they as self-owners produce and do, and the collectivist / statist / Keynesian camps, who start out with the notion that each of us has duties to others that allows those others to make claims upon us.

And so, debates about economics between people with these thoroughly incompatible premises do indeed bog down into a political debate, since the collectivist premise has not yet been completely refuted in every possible manifestation. Communism has been fairly thoroughly discredited among economists (though not among many Che T-shirt wearing members of the public), socialism has acquired a hint of disrepute, and social democracy is in fact the default form of governance worldwide and is widely accepted as a legitimate and workable approach to governance, though the cracks are starting to show.

The fact that Paul Krugman is a widely published and listened to columnist and taken seriously by people who call themselves economists, and was even awarded the effing Nobel Prize for his economic work, instead of being a discredited nobody laughed at for his economic statism and his bizarre policy recommendations, is proof enough for me that most economics currently practiced really is about politics and not about a rigorous science.

And so, until the collectivist mindset is discredited, most economic debate will continue to be like hearing alchemists insisting they are chemists, entitled to a place in the debate.

Post 12

Thursday, July 8, 2010 - 1:46pm

Jim, a few years ago on this site we had a participant who would write these articles/posts that were completely muddled and vague. He would throw in a bunch of contradictory statements, and would immediately jump to the next random thought in his head. After some of these, some of the other site users would hop on and applaud his genius. I was stunned, of course. What about his post could they possibly find so great? Turns out they picked out a few words here and there, which reminded them of their own thoughts or ideas, and attributed them to this writer. When they said what they thought was so great, it became clear there was nothing of the sort in the writing.

This has happened frequently over the years. Another frequent example is when there is a fierce debate. Usually everyone ends up in two camps. What I've seen is people with wildly different (and contradictory) views patting each other on the back and say "great post!". They saw a post arguing against the position they were also arguing against, and for some reason assumed they were allies. I seemed to be the only one that noticed they were in complete disagreement themselves. And they didn't even get upset when someone "agreed" with them by restating their position in a way that contradicted what they had originally said.

So when you tell us what you think the underlying point of Steve's post is, I have to wonder if you're reading into it what you want to.

I think the underlying point Steve is trying to make is that contemporary economic discussions often are between two camps who start out with fundamentally irreconciliable premises...

Is this a fair reading? Maybe you should try to find the place in this thread where Steve said anything like that. I think that might enlighten you. On my side, I can show many places where he talks about "economics" as a whole, and talks about the alleged flaws of it. And I can point to his comments about Austrian economics, highlighting what he believes are flaws there. I think the evidence is clear.

I think you've supplied your own best possible justification for the original quote. Instead of assuming that the author meant that economics wasn't a science, you've keyed in on the "irreconcilable points of view" part, which would explain the debate that never seems to go anywhere. But I think the original context made it clear that he was arguing against the validity of economics as a science. The "irreconcilable points of view" wasn't referring to the economic theories, but to the political theories, and the suggestion was that the economic theories are just rationalizations and pseudo-science used to try to convince people that their political views are grounded in science.

Post 13

Thursday, July 8, 2010 - 3:51pm

Joe,

In referring to my posts you wrote, "...I think the original context [of Steve's post] made it clear that he was arguing against the validity of economics as a science."

Wrong. I did not say that. I would not say that. It is not what I believe. I said, "I believe in economics as a field of study that should be useful. But I'm not happy with what I see so far - it is much like psychology, like all of the social sciences, a mess."

Because humans are volitional beings, there are problems when we are key to understanging the subject matter of a discipline. This is at the heart of what is wrong in all of the social sciences. It is not by accident that we don't have these problems in geology, physics, chemistry, etc.

Jim understood that complaint of mine and of Fred's very clearly. But it isn't the entire problem.

Here are the three complaints that I have, in a summary form:
1) Just as Fred and Jim have clearly grasped, different systems of Economics have sprung up and they contradict each other. These are often in use more to justify different political ends, than to understand the world around us.
2) Because we humans are volitional beings, and because we are capable of reason and irrationality, and because we are moved by emotions, and because we require a value system to live, any science involving these aspects of our nature in the subject matter needs to take special care to list and deal with the assumptions in play regarding human nature, epistemology and morality.
3) The economic system that I subscribe to, Austrian Economics, is the best of the bunch, but still has assumptions that contradicts some aspects of the epistemology and morality as presented by Ayn Rand - and these need to be worked on.
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You go on to write, "...the economic theories are just rationalizations and pseudo-science used to try to convince people that their political views are grounded in science."

I would not have used those words to describe economics. That feels like someone putting words in my mouth. I still don't want to discuss this, but I can't just sit on the sidelines and watch you tell someone else what I meant or what I was arguing for when you are wrong.
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Think about it for a minute. Jim and I rarely agree on things. I have been in his face post after post because of our diffences. Yet you make this condescending post about people who are completely muddled and vague with contradictory statments in their posts, yet they seek one another out for strange reasons that leave you stunned. You tell me I'm ignorant, but I can tell you still don't know what I've actually written. And you tell Jim he doesn't know what he read, and you proceed to make up some psychological theory why we might agree with each other. Who is it that is reading into it what they want to?

Post 14

Thursday, July 8, 2010 - 4:54pm

Steve, my criticism of Jim applies to you as well. Did you even bother to read his post? Did you read what he thought your motivation was? Because your "clarification" was not at all what Jim wrote. Jim has made an intelligent point here and accidently attributed it to you. He has pointed out that there are very different approaches to economics. He has pointed out that these camps start with fundamentally different assumptions, and presumably can't agree because of the different foundations.

You, on the other hand, did not suggest that there are multiple camps, and some of them are wrong. You've lumped them all together and thrown out accusations based on your lack of understanding of those differences. Your arguments have been that economics is flawed and not that different schools of economic thought have conflicting foundations. The two are wildly different.

Because humans are volitional beings, there are problems when we are key to understanging the subject matter of a discipline. This is at the heart of what is wrong in all of the social sciences. It is not by accident that we don't have these problems in geology, physics, chemistry, etc.

Actually, you are wrong in terms of the physical sciences as well. There are significant disagreements there as well (in terms of content, not necessarily in terms of percentage of people believing one way vs. another). In physics, for instance, there is a question of whether the science is supposed to identify what's really going on, or simply be able to make prediction. The majority appears to have decided that prediction is all that's need or possible (quantum physics has issues with identity).

1) Just as Fred and Jim have clearly grasped, different systems of Economics have sprung up and they contradict each other. These are often in use more to justify different political ends, than to understand the world around us.

There certainly are people who use economic language to rationalize their political ends. Obama talks about economic stimulus to promote his spending and political favors. But this is not an argument against economics. There are also people who use quantum physics to justify their skepticism and collectivism. There are those who use biology to justify their environmentalist morality. There are those who use evolution to justify their political ideals. Does this mean the other sciences are flawed? The fact that some people (even many people) attempt to make their own positions seem strong by reference to science is not a criticism of the science in any way.

Further, if you're complaint is that the wildly different economic schools of thought have something for everyone, the criticism should be aimed at the economic thought that's wrong, not economic thought as a whole.

2) Because we humans are volitional beings, and because we are capable of reason and irrationality, and because we are moved by emotions, and because we require a value system to live, any science involving these aspects of our nature in the subject matter needs to take special care to list and deal with the assumptions in play regarding human nature, epistemology and morality.

I'd like to see how you spin this complaint to be compatible with Jim's point. This has nothing to do with his claim that different schools of economic thought have fundamentally different assumptions. This is you asserting that economics isn't done right. Not that some schools have it wrong but one has it right. You are lumping them all together.

I think this can be safely interpreted as you once again showing your ignorance and asserting that since you don't know what the assumptions are, they must not exist and this is a flaw. The only flaw here is in your lack knowledge and your continued beliefs that you have some.

3) The economic system that I subscribe to, Austrian Economics, is the best of the bunch, but still has assumptions that contradicts some aspects of the epistemology and morality as presented by Ayn Rand - and these need to be worked on.

Once again, this shows your view that you think all economics is flawed, and not what Jim has said, that different economic schools of thought have very different approaches and end up being irreconcilable. Why do you then suggest that you aren't complaining about economics as a whole? Even the one you say you agree with most you are attempting to make a case that it is flawed.

I said you were arguing against the validity of economics as a science. You made a distinction that you think it could be a science (it could be useful), but it isn't now (or you're unhappy with what you see so far). You allow that it could be made valid, but that it isn't now. This just tries to avoid the point I made to Jim. He thought you were just pointing out that the schools of thought contradict in assumption, but that it was unfair for us to assume you were arguing against economics as a whole. But that's what you are doing. You're arguing that it is all flawed, although maybe it can be redeemed if they change their views. How in the world do you think you're in agreement? Jim is not arguing that all economics is flawed! He may or may not believe it (I assume he doesn't), but he hasn't given any indication of that!

Also, this criticism is once again completely flawed and if you read more Austrian Economics (or my own posts), you'd see why your suggestions are explicitly rejected. Austrian pride their theory on being "value-free". It's a deliberate choice, and a justified approach. Your desire to introduce moral premises would destroy the science and just leave a grab bag of moral assertions masquerading as science.

I would not have used those words to describe economics. That feels like someone putting words in my mouth.

Actually, my words were a summary of the original quote, which was Fred's, not yours. But since you claim to be in agreement with him, I don't know what the problem is.

And you tell Jim he doesn't know what he read, and you proceed to make up some psychological theory why we might agree with each other. Who is it that is reading into it what they want to?

I don't believe I've offered any psychological theories, unless you count saying that people pick a few words and read their own meaning into it. Hardly a motivation. If I were to offer a motivation, I could think of a few. One might think there is agreement because he honestly read too much into it, giving undue credit to another. Some might agree because their ultimate goal is to argue against a position, and not for a position. One person might suggest agreement because they feel sorry for the guy who's losing the argument, and try to find a way to defend him. Another might see agreement when there is none because he's been intellectually thrashed and is hoping to make his own position seem more sturdy by claiming that others agree with it.

Post 15

Thursday, July 8, 2010 - 8:39pm

JH: "... those in the Objectivist / Austrian / libertarian / individualist / free market camps, ... and the collectivist / statist / Keynesian camps, who start out with the notion that each of us has duties to others that allows those others to make claims upon us."

That is convenient. Christians could also demarcate those who derive economics from Scripture and those who do not. We might also agree that Steve meant what you said. However, as Joseph pointed out, he placed all economists under the same collective. Having just finished five years of college education from associate's to master's at fair-to-middlin' midwestern publicly-financed schools, I assure you that it is not that way at all.

In the undergraduate textbooks I saw -- both used for class and inspected on my own as alternatives -- Milton Friedman and the Chicago School hold the center with a nod to Keynes as not totally discredited. Karl Marx gets a margin. Ludwig von Mises gets a margin. Hayek is mentioned at the same status as Pareto.

In my graduate economics classes, I had the only two professors who were Marxists. One of my classmates had the word "Proletarian" tatooed on his neck and the professor warned him about certain "conservative" economics professors who would fail him for a Marxist interpretation of the facts.

I have several surveys of attitudes from employed professors and other metrics that also demonstrate a clear and consistent collectivist bias in academic education. These are peer-reviewed journal articles, not conservative rants. That said, who advocates what is not delineated, but rather, large numbers are aggregated into statistical statements. Steve did not complain that only 33% of all responding economics professors vote Republican (one of the findings, actually), but, rather, he included all economists under one label, clearly the fallacy of the unnamed collective.

Fred Barlett's original quote, while pithy, also fails. I recommend highly Thomas Kuhn's Structure of Scientific Revolutions. Although mounting failures will assail a paradigm, merely citing "facts" achieves little. Interestingly enough, the better paradigm might not explain known facts better than the mode it replaces.

(Edited by Michael E. Marotta on 7/08, 8:54pm)

Post 16

Friday, July 9, 2010 - 2:58am