|
Xelkelvos posted:It probably also doesn't help that I know nothing about Keynesian economics other than it's based around demand. It was engineering student talking to engineering student so neither of us likely knew all that much beside the broader points on our respective sides. His arguments were largely the broad Libertarian talking points about how regulation caused the two most recent crashes due to over regulation and so forth and I basically conceded since I didn't know much myself. There aren't really "pros and cons" of these two theories. One of them works, the other doesn't. The first thing to recognize is that economics isn't really about money. It's about human behavior, value, decision-making, and how these affect the generation and flow of both material and nonmaterial goods. It's a field that encompasses finance, psychology, and sociology all to a certain degree. The Keynesian school of economics is the mainstream view, and at its core it emphasizes that there's a "business cycle" that goes on. The economy is a bit of a rollercoaster, with peaks (economic booms) and dips (economic recessions or depressions), inflation and deflation (though usually more inflation). Keynesians believe that it is possible to moderate the business cycle so it doesn't go into crazy inflation on one end or depression on another by sound economic policy. The most basic way of doing this is through government spending when the economy is in decline, and cutting spending when the economy is doing OK. This is referred to "countercyclical spending," and usually people focus more on the government spending aspect. The Austrian school of economics arose decades ago when a small group of economists believed that human behavior was far too complex to measure empirically. Thus, any sort of empirical model of economics was futile. Austrian economists instead develop economic models based on a priori reasoning. Now, hopefully as an engineer you understand that this is absolute bullshit, because there's a big difference between what works in headspace and how things actually work in reality. And honestly, this is very typical of US Republican economic policies right now: they operate from what "sounds logical" (that is, "if you cut taxes and back the government out of the economy entirely, you'll unshackle the private sector and the economy will go into overdrive!") rather than looking at what historically does and doesn't work, often with disastrous consequences. Currently, a very fascinating case study is going on right now with Kansas where supply-sider Tea Party Libertarians took over. I have a thread about it right here. Overall, I think the best comparison between empirical Keynesians and rationalist Austrian-Libertarians is this: An empirical Keynesian would be like a conventional doctor and say "Well there's a lot that we don't know about cancer, but here's what we do know. Here's the prognosis, and some possible treatments that have so-and-so chance of working." A rationalist Austrian-Libertarian would be like a holistic medicine practitioner and say "Whoa there, the body is a total mystery! You actually don't know as much as you think, why don't you back off on that chemotherapy because you'll probably just gently caress things up even more. Let the body heal its cancer by itself, yo." In short: Austrian economics is dumb. quote:Edit: also that Keynesian basically funnels wealth more downwards rather than upwards, so to speak. Not necessarily. It really depends on the status of the economic model you're looking at. ShadowCatboy fucked around with this message at 11:29 on Sep 30, 2015 |
#
¿
Sep 30, 2015 11:27
|
|
|
|
| # ¿ May 9, 2024 17:03 |
|
|
Good poo poo here, just want to add a couple of more specific Empirical examples: As Godscock mentioned here, The New Deal (from 1933-1938) helped bolster the economy after the Great Depression through a lot of public spending projects, and it actually did a decent job of gradually improving the nation's GDP and reducing unemployment. However, about three or four years in Roosevelt apparently felt that the economy was in a safe space now and curbed government spending, which led to the recession of 1937-38, where GDP experienced a major dip and unemployment jumped up. Conservatives of course will interpret the cause of the recession differently, but Keynesians see it as essentially pulling the plug when the patient's not ready to breathe on his own yet. Certain specific forms of government spending have been tracked as being some of the best ways to stimulate the economy. At the top of the list, food stamps, which stimulates 1.73$ in transactions for every 1$ spent on them. Infrastructure spending is also a great method, and as an investment it also serves to catalyze new business ventures (just consider how high-speed trains stimulate the economy of every city they pass through since it means a new flow of workers, or how the internet revolutionized business). On the dismally low end of the scale: tax cuts to the wealthy. 
|
|
#
¿
Sep 30, 2015 11:47
|
|
|
Here OP, this is a very simple rundown of Keynesian economics VS Libertarianism: https://www.youtube.com/watch?v=otmgFQHbaDo
|
|
#
¿
Oct 1, 2015 18:18
|
|
|
icantfindaname posted:Austrianism is sneaky though because even though it pretends to be, it's not actually talking about the same thing that normal neoclassical econ is. Normal econ concerns itself with GDP, and seeks to find models that describe and predict what economic conditions maximize GDP. Austrianism, however, is essentially an ethical system under which abrogating property rights is basically the highest crime. They don't actually care about GDP or efficiency, it's a bunch of fancy words to say "got mine, gently caress you, keep away from my stuff" As a prime example, here is an essay from the Von Mises institute that argues it should be perfectly legal for a parent to let his children starve, or leave them to die on windswept crags like the Greeks of old. However, if we open up the free market to the sale of babies, this wouldn't really be a widespread problem: https://mises.org/library/children-and-rights
|
|
#
¿
Oct 5, 2015 00:25
|
|