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May 16, 2024 17:41
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- Sergg
- Sep 19, 2005
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I was rejected by the:
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Has anyone ever read the Wikipedia entry on the Austrian School of economics? It's hilarious.
Wikipedia posted:General criticisms[edit]
Mainstream economists have argued that Austrians are often averse to the use of mathematics and statistics in economics.[84]
Economist Bryan Caplan argues that many Austrians have not understood valid contributions of modern mainstream economics, causing them to overstate their differences with it. For example, Murray Rothbard stated that he objected to the use of cardinal utility in microeconomic theory. Caplan says that Rothbard did not understand the position he was attacking, because microeconomic theorists go to great pains to show that their results are derived for any monotonic transformation of an ordinal utility function, and do not entail cardinal utility.[21][85] The result is that conclusions about utility preferences hold no matter what values are assigned to them.[citation needed]
Economist Paul Krugman has stated that because Austrians do not use "explicit models" they are unaware of holes in their own thinking.[86] In February 2013, Krugman further criticized Austrian School economists on their failure to revise their theory of inflation in light of their incorrect prophecies of government-induced inflation following the 2008 financial crisis.[87]
Economist Benjamin Klein has criticized the economic methodological work of Austrian economist Israel M. Kirzner. While praising Kirzner for highlighting shortcomings in traditional methodology, Klein argued that Kirzner did not provide a viable alternative for economic methodology.[88] Economist Tyler Cowen has written that Kirzner's theory of entrepreneurship can ultimately be reduced to a neoclassical search model and is thus not in the radical subjectivist tradition of Austrian praxeology. Cowen states that Kirzner's entrepreneurs can be modeled in mainstream terms of search.[89]
Economist Jeffrey Sachs argues that among developed countries, those with high rates of taxation and high social welfare spending perform better on most measures of economic performance compared to countries with low rates of taxation and low social outlays. He concludes that Friedrich Hayek was wrong to argue that high levels of government spending harms an economy, and "a generous social-welfare state is not a road to serfdom but rather to fairness, economic equality and international competitiveness."[90] Austrian economist Sudha Shenoy responded by arguing that countries with large public sectors have grown more slowly.[91]
Methodology[edit]
Critics generally argue that Austrian economics lacks scientific rigor and rejects scientific methods and the use of empirical data in modelling economic behavior.[10][84][92] Some economists describe Austrian methodology as being a priori or non-empirical.[10][20][84][93]
Economist Mark Blaug has criticized over-reliance on methodological individualism, arguing it would rule out all macroeconomic propositions that cannot be reduced to microeconomic ones, and hence reject almost the whole of received macroeconomics.[94]
Economist Thomas Mayer has stated that Austrians advocate a rejection of the scientific method which involves the development of empirically falsifiable theories.[92][93] Furthermore, many supporters of using models of market behavior to analyze and test economic theory argue that economists have developed numerous experiments that elicit useful information about individual preferences.[95][96]
Economist Leland Yeager rejects many favorite views of the Misesian group of Austrians, in particular, "These include the specifics of their business-cycle theory, ultra-subjectivism in value theory and particularly in interest-rate theory, their insistence on unidirectional causality rather than general interdependence, and their fondness for methodological brooding, pointless profundities, and verbal gymnastics. Provoked by mainstream abuses of mathematics, including the frequent merely decorative and pretentious use of symbols, some Austrians have wanted to ban mathematics from economics. But is it not arrogant for someone who does not see how to use certain techniques constructively to suppose that no one else will ever see how either? These Austrians should remember how, in other contexts, they emphasize the openness of the future and scope for novelty."[97]
It also contains a choice with a quote from Milton Friedman himself, who says:
Milton Friedman posted:I think the Austrian business-cycle theory has done the world a great deal of harm. If you go back to the 1930s, which is a key point, here you had the Austrians sitting in London, Hayek and Lionel Robbins, and saying you just have to let the bottom drop out of the world. You’ve just got to let it cure itself. You can’t do anything about it. You will only make it worse. You have Rothbard saying it was a great mistake not to let the whole banking system collapse. I think by encouraging that kind of do-nothing policy both in Britain and in the United States, they did harm.[105]
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Aug 14, 2014 03:00
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Jun 30, 2014 04:25
