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Guest Post: A Critique of the Methodology Of Mises & Rothbard

Tyler Durden's picture




 

Submitted by John Aziz of Azizonomics,

I find myself in the middle of a huge blowup between Max Keiser and Tom Woods over Mises, Menger and Austrian economics and feel that this is an opportune moment to express some doubts I have regarding contemporary Austrian methodology.

I am to some extent an Austrian, on three counts.

First, I subscribe to the notion that value is subjective; that goods’ and services’ values differ according to different individuals because they serve various uses to various users, and that value is entirely in the eye of the beholder.

Second, I subscribe to the notion that free markets succeed because of the sensitive price feedback mechanism that allocates resources according to the real underlying shape of supply and demand and conversely the successful long-term allocation of labour, capital and resources by a central planner is impossible (or extremely unlikely), because of the lack of a market feedback mechanism.

Third, I subscribe to the notion that human thought is neither linear nor rational, and the sphere of human behaviour is complicated and multi-dimensional, and that attempts to model it using linear, mechanistic methods will in the long run tend to fail.

It is not, then, the overall drift of Misesean-Rothbardian economics that I find problematic — indeed, I often find myself drawing similar conclusions by different means — but rather the methodology.

I reached my views — some of which new evidence will eventually wash away — through a lot of theorising mixed with much careful observation and consideration of case studies, historical examples and all sorts of real world data. I love data; and one of the things that attracted me toward thinking and writing about economics is the beautiful superabundant growth of new data opened up to the world by computers and the internet. No, it is not universal or complete, and therefore building a perfect predictive model is not possible, but that is not the point. If I want to know how the corn price in the USA moved during the first half of the twentieth century, the data is accessible. If I want to know the rate of GDP growth in Ghana in 2009, the data is accessible. If I want to know the crime rate in France, the data is accessible.

Miseseans choose to reach their conclusions not from data, but instead from praxeology; pure deduction and logic.

This is quite unlike the early Austrians like Menger who mainly used a mixture of deductionism and data.

According to Rothbard:

Praxeology rests on the fundamental axiom that individual human beings act, that is, on the primordial fact that individuals engage in conscious actions toward chosen goals. This concept of action contrasts to purely reflexive, or knee-jerk, behavior, which is not directed toward goals. The praxeological method spins out by verbal deduction the logical implications of that primordial fact. In short, praxeological economics is the structure of logical implications of the fact that individuals act.

And Mises:

Our statements and propositions are not derived from experience. They are not subject to verification or falsification on the ground of experience and facts.

This is completely wrongheaded. All human thought and action is derived from experience; Mises’ ideas were filtered from his life, filtered from his experience. That is an empirical fact for Mises lived, Mises breathed, Mises experienced, Mises thought. Nothing Mises or his fellow praxeologists have written can be independent of that — it was all ultimately derived from human experience. And considering the Austrian focus on subjectivity it is bizarre that Mises and his followers’ economic paradigm is wrapped around the elimination of experience and subjectivity from economic thought.

If, as I often do, I produce a deductive hypothesis — for instance, that the end of Bretton Woods might produce soaring income inequality — it is essential that I refer to data to show whether or not my hypothesis is accurate. If I make a deductive prediction about the future, it is essential that I refer to data to determine whether or not my prediction has been correct.

Exposing a hypothesis to the light of evidence augments its strong parts and washes away its weaker ones. When the evidence changes, I change my opinion irrespective of what my deductions led me to believe or what axioms those deductions were based upon. Why reach the conclusion that central planning can induce civilisational failure through pure logic when the historical examples of Mao’s China and Stalin’s Russia and Diocletian’s Rome illustrate this in gory detail?

This is elementary stuff. Deduction is important — indeed, it is a critical part of forming a hypothesis — but deductions are confirmed and denied not by logic, but by the shape of the evidence. In rejecting modelling — which has produced fallacious work like DSGE and RBCTbut also some relatively successful models like those of Minsky and Keen — praxeologists have made the mistake of rejecting empiricism entirely. This has confined their methods to a grainier simulation; that of their own verbal logic.

It is not necessary to define a framework through mathematical models in order to practice empirical economics. Keynes was cited by Rothbard in support of the notion that economics should not be fixated on mathematical models:

It is a great fault of symbolic pseudo-mathematical methods of formalizing a system of economic analysis, that they expressly assume strict independence between the factors involved and lose
all their cogency and authority if this hypothesis is disallowed: whereas, in ordinary discourse, where we are not blindly manipulating but know all the time what we are doing and what the words mean, we can keep “at the back of our heads” the necessary reserves and qualifications and the adjustments which we have to make later on, in a way in which we cannot keep complicated partial differentials “at the back” of several pages of algebra which assume that they all vanish. Too large a proportion of recent “mathematical” economics are mere concoctions, as
imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols.

And I agree. But nowhere did any of the figures cited by Rothbard; not Keynes, nor Wild, nor Frola, nor Menger endorse a wholly deductionist framework. All of these theorists wanted to work with reality, not play with logic. Create a theory; test; refine; test; refine; etc.

Praxeologists claim that praxeology does not make predictions about the future, and that any predictions made by praxeologists are not praxeological predictions, but instead are being made in a praxeologist’s capacity as an economic historian. But this is a moot point; all predictions about the future are deductive. Unless predictions are being made using an alien framework (e.g. a neoclassical or Keynesian model) what else is the praxeologist using but the verbal and deductive methodology of praxeology?

It has been the predictive success of contemporary Austrian economists — at least in identifying general trends often ignored by the mainstream — that has drawn young minds toward Misesean-Rothbardian economics.

Of those economists who predicted the 2008 crisis, a significant number were Austrians:

Yet Miseseans including Peter Schiff damaged their hard-earned credibility with a series of failed predictions of imminent interest rate spikes and hyperinflation of the dollar by 2010.

That is not to say that interest rate spikes and high inflation cannot emerge further down the line. But these predictive failures were symptomatic of deduction-oriented reasoning; Miseseans who forewarned of imminent hyperinflation over-focused on their deduction that a tripling of the monetary base would produce huge inflation, while ignoring the empirical reality of Japan, where a huge post-housing-bubble expansion of the monetary base produced no such huge inflation. Reality is often far, far, far more complex than either mathematical models or verbal logic anticipates.

Like all sciences, economics should be driven by data. For if we are not driven by data than we are just daydreaming.

As Menger — the Father of Austrianism, who favoured a mixture of deductive and empirical methods — noted:

The merits of a theory always depends on the extent to which it succeeds in determining the true factors (those that correspond to real life) constituting the economic phenomena and the laws according to which the complex phenomena of political economy result from the simple elements.

Praxeology is leading Austrian economics down a dead end.

Austrianism would do well to return to its root — Menger, not Mises.

 

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Tue, 08/28/2012 - 19:22 | 2744967 flacon
flacon's picture

I've noticed there have been risings of the Austrians lately - the "true" Austrians (Menger) verses the faux Austrians (Mises). I'll have to do more research about this topic. 

Tue, 08/28/2012 - 19:31 | 2745032 Nothing To See Here
Nothing To See Here's picture

Highly disappointing article. Data always comes from measurement. Measurements can be reliable in physical sciences, but not in social sciences where psychological and abstract factors are involved. This is why Austrian economics are also sometimes called the psychological school, since they are the only economists who seem to grasp that this field of study must be based on human action (per the Mises book) rather than on a pretense of human measurements.

Tue, 08/28/2012 - 19:35 | 2745045 Flakmeister
Flakmeister's picture

Economics is the continuation of Ideology by other means.....

Tue, 08/28/2012 - 19:42 | 2745067 AurorusBorealus
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And that is the problem with draping these things in the rhetoric of science.  Science is first and foremost an empirical endeavor... or it is not science at all.

Tue, 08/28/2012 - 19:53 | 2745088 Dr Benway
Dr Benway's picture

Any ideology that ignores reality and empiricism in the favor of theory and pipedream is not only foolish but highly dangerous.

Misesians have their head completely in the cloud and live in an ivory tower.

Tue, 08/28/2012 - 20:08 | 2745121 economics9698
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Schiff, and other Austrians know a standard boom, bust cycle is 3-5 years depending on the central bank, etc.

I do not recall Schiff making a 2010 prediction but I could be wrong.  All the Austrians I know are pointing to 2012/13 being the bad years and I would say that is pretty fucking accurate.

Tue, 08/28/2012 - 20:11 | 2745130 Nothing To See Here
Nothing To See Here's picture

Real Austrians don't pretend that they can make quantitative predictions. They will only go as far as to make qualitative observations.

Quantitative methods are at the root of socialism and of the pretense of knowledge which drives central planning.

Tue, 08/28/2012 - 20:59 | 2745255 treasurefish
treasurefish's picture

This article was worth reading for having the opportunity to read this comment alone.

Tue, 08/28/2012 - 21:18 | 2745306 strannick
strannick's picture

Dear Eggheads;

We all love Austrians. However, when it comes to the ivory tower, hair-splitting, sholastic, how-many-angels-fit-on-the-head-of-a-pin debates, you lose us. While Im sure your intoxicated by your new ascendant noteriety', please keep it simple for us stupids. We appreciate that debt doesnt cure more debt, that the first users of new money get the biggest bang for the buck, and the rest. Please stick to the basics and dont lose your audience in your academic gobbledegook. 

Tue, 08/28/2012 - 21:49 | 2745398 AldousHuxley
AldousHuxley's picture

All of these theories deal with absolute wealth growth, but problem today is beyond the basic necessities of life.

 

Today's problem is status.

 

Which of these theories solve the problem of relative wealth?????

 

People don't give a shit if they are 100 times richer than African tribesmen. They sure covet their neighbor's new luxury car, house, wife and will cheat others to one up it.

Tue, 08/28/2012 - 22:13 | 2745467 treasurefish
treasurefish's picture

Ron Paul; Mises solves it for you.  There is no problem with freedom.  Is there?  My ambition in life is to become a successful family farmer, and raise my children in paradise on 10 acres of land.  If I achieve this status, then I will be successful.  I don't see that as a problem, that is, until the Liberal rule-keepers say I can't grow my grass to high or have certain animals.  Their view of status is very different than mine.  All goes back to Common Law and individual freedom.  Central planning is for the slaves.

Tue, 08/28/2012 - 23:51 | 2745626 LetThemEatRand
LetThemEatRand's picture

So "Liberal rule-keepers" are the problem?  What about the rules imposed by so-called Conservatives?  Seems to me that those who commonly use that label have issues with what you may grow on your land, the water that you may use there, the brand of seeds you may use, and many other issues.  Perhaps you used the word "Liberal" reflexively, but if you mean to distinguish Ronald Regan or any other self-described conservatives from your hated self-described liberals when it comes to bullshit rules, then you need to do some further research.

 

Tue, 08/28/2012 - 23:57 | 2745647 LetThemEatRand
LetThemEatRand's picture

Reagan on women's rights to reproduction versus the State telling them what to do:  http://www.issues2000.org/celeb/Ronald_Reagan_Abortion.htm

Tue, 08/28/2012 - 23:59 | 2745651 LetThemEatRand
Wed, 08/29/2012 - 10:53 | 2746539 Hugh_Jorgan
Hugh_Jorgan's picture

Monsanto is Godzilla

Wed, 08/29/2012 - 00:05 | 2745664 Saro
Saro's picture

Upvotes for you all around because the liberals vs. conservatives canard is so, so tired.

Wed, 08/29/2012 - 00:24 | 2745690 LetThemEatRand
LetThemEatRand's picture

We may have a different vision of what freedom means -- as did the Founding Fathers even amongst themselves -- but if we could just break this Blue Team/Red Team, Liberal/Conservative matrix, we could all have a beer, scotch, vodka, joint or water or whatever together and talk meaningfully about the proper role of limited government and get somewhere.  What a great day that would be.  

Wed, 08/29/2012 - 07:57 | 2745974 SWRichmond
SWRichmond's picture

If I want to know how the corn price in the USA moved during the first half of the twentieth century, the data is accessible. If I want to know the rate of GDP growth in Ghana in 2009, the data is accessible. If I want to know the crime rate in France, the data is accessible.

Miseseans choose to reach their conclusions not from data, but instead from praxeology; pure deduction and logic.

This is quite unlike the early Austrians like Menger who mainly used a mixture of deductionism and data.

The data is tainted by market interventions.  Market interventions are now the rule rather than the exception.  You may rely on "data" if you wish; in this environment, I will choose not to or, which might be worse, be selective about which data I rely on and which I ignore.

Any longtime reader of ZH and many other sites knows that there are no markets, there are only interventions.

Wed, 08/29/2012 - 06:57 | 2745920 Freewheelin Franklin
Freewheelin Franklin's picture

Which of these theories solve the problem of relative wealth?????

 

Marxist LTV, of course. We can ALL eat boiled rice, wear gray jumpsuits, and live 5 to a one room apartment.

 

Freedom, Man!  

Wed, 08/29/2012 - 10:48 | 2746509 Hugh_Jorgan
Hugh_Jorgan's picture

Aldous, there is no way to solve the issue of relative wealth. It sounds to me like it is time to make your decision on who's law is supreme. God's or man's?

Society waxes and wanes in it's fear of the true Creator deity. We are living a time of deficeit in that regard and look where we are.

Man will covet and kill. Man will lie, cheat and steal. This world will NEVER be anything but a little better at times, and at times a little worse. It is all this world can ever be. It is up to every individual to make the conscious decision to strive daily to resist their human weakness in the belief that he will benefit the system somewhat here and now, and benefit himself beyond this world if he does so with a greatful heart.

Your choice.

Tue, 08/28/2012 - 23:29 | 2745601 JeffB
JeffB's picture

Lilburne has a pretty nice set of slides going through basic Austrian concepts in comic book style here: https://picasaweb.google.com/Lilburne2

I picked up a copy of Henry Hazlitt's classic, Economics In One Lesson: The Shortest and Surest Way to Understand Basic Economics at my local library. It was a 50th anniversary edition, but his insightful observations and analysis were every bit as relevant today as they were then. Our politicians and economist are making the same tragic mistakes they were making then and the examples he gave were still quite useful even if they occurred decades ago.

I think that Auburn economics professor, Roger W. Garrison does a great job of explaining the Austrian Trade Cycle in a Power Point Slide presentation he gave to a class that you can watch on YouTube: http://www.youtube.com/watch?v=zhoFOyy7rbo

He uses Hayek's equations and formulas to explain how and why the central banksters manipulation of the money supply and of interest rates causes the misallocation of resources giving us the resultant booms and busts.

They don't give measurements and numbers down to the penny like the Treasury sometimes does, but it's common sense stuff that is easily grasped. More importantly those using its methodology are quite accurate in predicting the results of Fed actions years in advance.

The Austrians were jumping up and down screaming about the catastrophe the Fed's policies were going to bring down on us in the years preceding the crisis which finally hit in 2008. Some got wealthy. Others got to say "I told you so."

The YouTube compilation of interview clips, Peter Schiff was Right, Bernanke Was Wrong is a prime example of the Austrians being ridiculed for warning of the dangers during the boom phase following the Fed easy money injections.

Despite all of the Fed's pretty equations, armies of statisticians at their disposal, and data coming out of their ears they, and the mainstream economists were caught with their pants around their ankles, completely befuddled about what had happened despite their repeated reassurances that everything was fine.

Nobel Laureate Paul Krugman summed it up in his NY Times article, How Did Economists Get It So Wrong? - NYTimes.com

Peter Schiff, in his inimitable style wouldn't let the Fed off the hook when they did their analysis after the fact and claimed that they had nothing to do with causing the housing bubble. They gave data and statistics "proving" it wasn't their fault.

Peter Schiff's article on Seeking Alpha took Bernanke to task for that bodacious claim. See the excerpt below:

 Fed to People: It's Not Our Fault

"...As proof that the Fed caused the housing bubble, I offer a commentary that I wrote in May of 2004 and which was published as an opinion piece in the Orange County Register.

You can read the entire commentary here.

However, let me reproduce some key quotes:

That so many are currently opting for ARMs reflects a level of real estate speculation unparalleled in American history. Homebuyers have been lured into this foolish choice by... a Fed chairman desperate to keep the real estate bubble inflating. Unfortunately, the longer the Fed remains "patient" with regard to raising short-term interest rates to appropriate levels, the more homeowners that will be lured into the ARM time bomb.

The real losers in this whole fiasco are likely to be those who did not even participate in the mania. As over-leveraged borrowers walk away from properties in which they have no equity, the Fed will most likely attempt to bail out both debtors and bank depositors (and the government sponsored enterprises that insured the loans) with the most inflationary monetary policy ever undertaken in the history of central banking. The savings of an entire generationwill be wiped out, as it will have been squandered to perpetuate the biggest real estate and consumer debt bubbles of all time.

 "Now if I could have seen that coming as early as May 2004, why couldn't the Fed? Even with the full benefit of hindsight, Bernanke still cannot recognize the Fed's mistakes. ..."

People may not like the seemingly subjective nature of the deductive reasoning used in Austiran economics, and don't think it's scientific enough, but I disagree. I think when they observe what is going on in the economy and how people act, and have acted in the past, and come up with reasonable models of how and why things work that not only make intuitive sense, but fit the data as well, that we shouldn't dismiss them out of hand, even when they disagree with the powers that be.

One of the pillars of science, of course, is the scientific method. I submit that we've in essence tested the respective hypotheses of the mainstream economists and the Austrian economists over the last decade (& in prior decades as well), and the mainstream economists theories blew up in their faces, and the Austrians looked like geniuses in the aftermath.

I've read that some economists said that Mises likely would have won the Nobel Prize in Economics had the prize existed at the time he warned of the Fed's errors that caused and then exacerbated the Great Depression.

I think historian Thomas Woods, Jr. gives an interesting account of the two depressions we had in the 1920s. One where the government did nothing (other than raise taxes to lower the deficit), and the other where the government intervened mightily and repeatedly. You can view his talk here: Why You've Never Heard of the Great Depression of 1920

 

Wed, 08/29/2012 - 06:28 | 2745895 circusmaestro
circusmaestro's picture

Austrians get it right. Reality is made of qualities and quantities but the essence of a living phenomenon is purely qualitative. Quantities are always external to the thing itself whereas qualities are embeded within the phenomenon one tries to apprehend. See Henri Bergson and phenomenologists. Austrians are true phenomenologists. Menger understood that the relationship between the observer and the object always determines the experiment.

Tue, 08/28/2012 - 21:05 | 2745273 flacon
flacon's picture

That's a pretty good fucking face book quote. It's mine now: "Quantitative methods are at the root of socialism and of the pretense of knowledge which drives central planning.

 

Awesome! 

Tue, 08/28/2012 - 21:58 | 2745417 White.Star.Line
White.Star.Line's picture

Spoken like a REAL Austrian Economist!

We really need no further discussion, than Hans Hoppe's statement:
"Fractional reserve banking is nothing more than fraud, backed by armies used for extortion."

Wed, 08/29/2012 - 02:15 | 2745764 granolageek
granolageek's picture

You have just stated that economics is not a science. Physics is science. Theories live and die by quantative predictions.

Austrian economics is a platonic circle jerk. The Keynesians at least fricking try.

Wed, 08/29/2012 - 06:44 | 2745911 Freewheelin Franklin
Freewheelin Franklin's picture

Any ideology that ignores reality and empiricism in the favor of theory and pipedream is not only foolish but highly dangerous.

 

Empiracism is only effective if the results can be recreated under controlled conditions.

 

If I use these methods: A,B,C,and D to show that F=ma in my laboratory, you should be able to recreate the same results as I, and reach the same conclusion.

Question: How do you recreate the an economic event such as the Great Depression and the results that WWII had? The answer is, you can't. The only way to use any type of empiricism is to rely on statistical mathematics. And we all konw the limitations of statistics, right?

"While the individual man is an insoluble puzzle, in the aggregate he becomes a mathematical certainty.  You can, for example, never foretell what any one man will be up to, but you can say with precision what an average number will be up to.  Individuals vary, but percentages remain constant.  So says the statistician."

  ~Arthur Conan Doyle

et al:

http://www.quotegarden.com/statistics.html

Tue, 08/28/2012 - 20:10 | 2745115 economics9698
economics9698's picture

Rothbard cracks me up sometimes.  He was a big numbers guy and did impeccable research into the numbers in many areas of his life's work.  Read any of his books and he is absolutely anal about proving his point with numbers.

You know the old saying, don't believe everything you read.  I think Austrians overemphasize praxeology because they want students to not concentrate on models and theory and UNDERSTAND money and banking.

Nothings perfect.

 

Tue, 08/28/2012 - 23:35 | 2745258 LetThemEatRand
LetThemEatRand's picture

Are you still a government contractor, economics9698?   Do you teach at a public or private university/school?  You are entitled to your opinion in any event, but full disclosure and all that....

Tue, 08/28/2012 - 19:41 | 2745062 AurorusBorealus
AurorusBorealus's picture

It is not a science, rightly speaking, without measurement, data, and empirical method.  Instead you have dogmatic theory, which is precisely the problem with every school of economics.  I have no idea how anyone could possibly contend that human behavior can not be observed and does not provide any meaningful data.  As for the "psychology" school, there psychology is derived from that of Pavlov and Skinner, empiricists-- both of them.

Tue, 08/28/2012 - 21:21 | 2745302 treasurefish
treasurefish's picture

You appear to be what's wrong with this country.  Just saying.  I am very random.  I often buy shit on a whim.  I am not predictable - even if you analyze my DNA, my travels, my tweets, or anything else about me.  Good luck trying.

 

Past observations do not reflect future consumer performance.

Tue, 08/28/2012 - 22:29 | 2745517 Nothing To See Here
Nothing To See Here's picture

Exactly. You disproved the maximum efficiency hypothesis right there...

Tue, 08/28/2012 - 20:55 | 2745243 HardAssets
HardAssets's picture

Yes, the problem in the social sciences - - versus the physical sciences - - is we cannot isolate the various influences on the final result as in a lab experiment - except on a very limited basis. One may imagine that factor X caused condition Y in the macro-economy - - - when it was actually unknown conditions A, B, and C which were the real causes.

Complex analytical methods are of more use at the microeconomic level - - a manufacturing plant or perhaps for a firm.

Just because the Austrians doubt the value of various numerical tricks, doesn't mean they don't look at history. Rothbard wrote a great deal on history and economics - - - including his study of the Great Depression of the 1930s and the Panic of 1819.

I'm sorry, but I've read criticisms of Austrian economics lately, by those who seem to have not understood it.

Tue, 08/28/2012 - 22:08 | 2745454 masterinchancery
masterinchancery's picture

Was there some point to this article? Mises and the Austrian school are based on empirical knowledge of how humans behave, on the average, not some gimmicky statistical model. Keynesians love models; the problem is, they don't work; Keynes didn't even have a theory of capital formation, the most important factor in economic development.

Tue, 08/28/2012 - 19:47 | 2745076 Offthebeach
Offthebeach's picture

It's inside baseball and is and always will be beyond 98% of pubic skool edjamakeded Amererkins.
I've had to go from Reagan, to Friedman to Cato to Mises. 30 years.

Lets have no enemies in however moving to more freedom.

Tue, 08/28/2012 - 21:02 | 2745260 vast-dom
vast-dom's picture

So because Bernanke & Co's thoughts are TOO linear and irrational and therefore they have stripped ALL price feedback mechanism[s] that allocates resources according to the real underlying shape of supply and demand... Almost works out?

Tue, 08/28/2012 - 21:42 | 2745386 Palmer Eldritch
Palmer Eldritch's picture

It's pretty simple why you're seeing this.  the Misesians are winning the intellectual debate and the powerful along with their slave-society quislings are scared of losing their rent-seeking positions.  It's a shame someone as smart as John is becoming one of their useful idiots. 

A useful idiot of an idiot (Max Keiser).... *shakes head*

This all started with a return of The Fekete and his obsession with the Real Bills doctrine.  This fight's been going on for more thn 10 years between the Mises Institute and this guy and his disciples.  It's as old as the hills. 

http://www.garynorth.com/public/6092print.cfm

http://mises.org/daily/1833

It's nothing new.  Fekete's been peddling this with new students for years and the Mises Institute has responded adequately to the situation.

ta,

Tue, 08/28/2012 - 21:50 | 2745406 HardAssets
HardAssets's picture

I agree with 95% of your comment (must be precise !)

I don't think Max Keiser is an idiot - - he's a sharp guy. But he often makes very uninformed statements on Austriian economics.

Don't even get me started on Tarpley.

Tue, 08/28/2012 - 22:00 | 2745426 Palmer Eldritch
Palmer Eldritch's picture

Max is a smart guy and a good agent provacateur surebut that's as far as it goes.

but he also subscribes to both the Greenbacker movment and Global freaking warming... that disqualifies him on any other grounds.

 

ta,

 

Tue, 08/28/2012 - 23:01 | 2745564 goldfish1
goldfish1's picture
Economist Appearing On Max Keiser Show Forced To Resign

It’s been confirmed now that economist Sandeep Jaitly has been forced to resign his position from The Gold Standard Institute following his on-air remarks about Ludwig von Mises

http://www.forbes.com/sites/jonmatonis/2012/08/26/economist-appearing-on...

Great article.

Tue, 08/28/2012 - 19:18 | 2744990 hannah
hannah's picture

zzzzzzzzzzzzzzzzzzzzzzzzzzzz......zzzzzzzzzzzz.....zzzzzz...zzzzzzzzzzzzzzzzzzzzz.

Tue, 08/28/2012 - 19:18 | 2744991 hannah
hannah's picture

zzzzzzzzzzzzzzzzzzzzzzzzzzzz......zzzzzzzzzzzz.....zzzzzz...zzzzzzzzzzzzzzzzzzzzz.

 

*...damn...fell asleep and hit the enter button a second time.

Tue, 08/28/2012 - 19:19 | 2744993 tu-ne-cede-malis
tu-ne-cede-malis's picture

That chart is missing a significant number of Austrians/Austrian-leaning economists. 

Tue, 08/28/2012 - 22:03 | 2745437 White.Star.Line
White.Star.Line's picture

Noticed that also.
Where is Hans Hoppe? One of world's greatest "historical-based" Austrian theorists?

Tue, 08/28/2012 - 22:09 | 2745438 White.Star.Line
White.Star.Line's picture

OF course, even he would agree: any system based on computerized, fractional-reserve banking, without regard to anything other than exponential growth of profits, spread all over the world, and accepted by billions of disinterested people, might fail, or it might work......

Tue, 08/28/2012 - 19:21 | 2745001 GMadScientist
GMadScientist's picture

hahahahahahahaaaaaaaa.

no one takes you seriously. know this.

Tue, 08/28/2012 - 19:23 | 2745006 Catullus
Catullus's picture

This is completely wrongheaded. All human thought and action is derived from experience; Mises’ ideas were filtered from his life, filtered from his experience. That is an empirical fact for Mises lived, Mises breathed, Mises experienced, Mises thought. Nothing Mises or his fellow praxeologists have written can be independent of that — it was all ultimately derived from human experience. And considering the Austrian focus on subjectivity it is bizarre that Mises and his followers’ economic paradigm is wrapped around the elimination of experience and subjectivity from economic thought.

So when the Miseans begin with "all human beings must act", how is that "wrongheaded"? Seems to me ultimately the "data" can't disprove what the
Deductive reasoning has just proven. Choose all you want to ignore that axiom because you haven't verified it with your data yet.

And while you're at it, make sure you prove out all of mathematics before you do anything. Collect the data that 2 + 2 = 4. Don't just accept that 2 and 2 is 4 just because someone defined it as such. Go out and collect the data yourself. And if it comes back that 2 and 2 doesn't equal 4, you can let us all know.

Tue, 08/28/2012 - 19:24 | 2745008 Flakmeister
Flakmeister's picture

Like the data showing that tax cuts create jobs and deficits don't matter????? 

The dog must have eaten it....

Oh yeah....

Queuing up Dr. Acula in 5, 4, 3, 2, 1....

Tue, 08/28/2012 - 19:26 | 2745015 LetThemEatRand
LetThemEatRand's picture

Bravo to the author for taking on this subject.  I would add that the Mises Institute and to a lesser extent Schiff, have become tools for corporatism.  For that, I blame Rand. 

Tue, 08/28/2012 - 19:30 | 2745028 Catullus
Catullus's picture

What is that based on?

Tue, 08/28/2012 - 19:31 | 2745035 LetThemEatRand
LetThemEatRand's picture

Who are the top 20 donors of the Mises Institute?

Tue, 08/28/2012 - 19:42 | 2745064 Manipuflation
Manipuflation's picture

Well? We are waiting for the top 20 donors list.  It's certianly not on this link....

http://www.zerohedge.com/news/guest-post-god-dont-save-queen

Tue, 08/28/2012 - 19:59 | 2745091 LetThemEatRand
LetThemEatRand's picture

Are you saying you don't know and don't care?

How about if Rockefeller was one of the biggest donors?  http://www.independent.org/publications/tir/article.asp?a=692

Tue, 08/28/2012 - 20:34 | 2745178 Manipuflation
Manipuflation's picture

I do know about Rockefeller funding Mises and have for many years but that does mean that Mises's observations were not true in most cases.  You are also presenting circumstantial evidence here by your continual use of snippets from other articles.  I asked you for the list of the top 20 contributors to Mises.  I still have not seen that list. 

You will have to develop your argument further than just guilt by association.  I am not disagreeing with your praxeology but rather am asking for empirical evidence.

Wed, 08/29/2012 - 04:03 | 2745827 Cassandra Syndrome
Cassandra Syndrome's picture

Rothbard was a critic of the Rockefellers

http://lewrockwell.com/rothbard/rothbard269.html

He was a superb truthseeker long before the internet and when it became cool!

 

Tue, 08/28/2012 - 21:26 | 2745335 Bay of Pigs
Bay of Pigs's picture

That funding went to NYU who decided who and where the money went. Rockefeller wasn't in charge of that.

Once again, and not surprisingly, you make assumptions that dont add up.

Tue, 08/28/2012 - 20:17 | 2745141 LetThemEatRand
LetThemEatRand's picture

 

Chris Horlacher, Director of the Von Mises Institute of Canada.   Note that Deloitte was auditor of Bear Stearns.

"Chris is a Chartered Accountant currently in private practice and project consulting.  He was an Assistant Manager at Deloitte & Touche LLP, providing audit and assurance services to numerous Fortune 500 companies, pension funds and mid-sized businesses.  After leaving Deloitte he worked with Euro Pacific Canada Inc. as the Chief Financial Officer during their start up period.  As a private consultant and accountant, Chris continues to provide his financial, accounting and management expertise to individuals and companies."

 

Tue, 08/28/2012 - 20:32 | 2745172 Catullus
Catullus's picture

So they have a low level auditor who worked at Deloitte?

Tue, 08/28/2012 - 20:55 | 2745245 LetThemEatRand
LetThemEatRand's picture

So who are the top 20 contributors if you don't care who sit in the the directors' chairs?

Or do you only want to know who a fictional character -- John Galt -- is?

Tue, 08/28/2012 - 21:10 | 2745296 BigJim
BigJim's picture

And who are your top 20 contributors, LetThemEatRand?

Or should we just judge your 'contributions' on their own 'merits'?

According to you, though, that's not possible - we can only know if your heart is true, oops, sorry, statements are correct, if we know who pays for your lunches.

You really are most heart-achingly dumb.

 

Tue, 08/28/2012 - 21:25 | 2745330 LetThemEatRand
LetThemEatRand's picture

Putting aside the inevitable personal attack once you have decided you are defeated ("you really are most heart-achingly dumb"), is it your position that ZH and others who make hay of the contributors to political candidates are just wasting their time?

Full disclosure:  I have no contributors.  I speak my mind and need not worry about a corporation or individual taking issue with one of my posts, unlike the Mises Institute.

Tue, 08/28/2012 - 21:59 | 2745425 Manipuflation
Manipuflation's picture

"I have no contributors."

How so LTER?  Are you saying that you do not trade or use some form of currency from any source at all regarding your everyday life?  That would be diffucult to believe but I offer you the oppurtunity to explain yourself if you wish.  I posit that in fact you do have contributors and you may not even realize it. 

Tue, 08/28/2012 - 22:04 | 2745445 LetThemEatRand
LetThemEatRand's picture

Do you not understand the distinction between receiving money to write about economic theories and to defend the actions of giant corporations who contribute to you (Mises Institute), versus having a life and career that has nothing to do with those things and posting on ZH (me)? 

Tue, 08/28/2012 - 22:51 | 2745553 Manipuflation
Manipuflation's picture

I do indeed understand but do you not understand the concepts of circumstantial evidence?  You really seem to have an issue with how the finance worked and/or works for Mises Institute but you do not present anything other than hyperbole and you fail to refute the Austrian School at the same time.  A number of posters have made very strong arguments against your assertions.  My suggestion to you LTER is to stop making vague assertions and to come up with a hypothesis which you can gather evidence to support and compile some documentation to present to the world.

Circumstantial evidence is not evidence at all.  Case dismissed.

  http://en.wikipedia.org/wiki/Circumstantial_evidence

Tue, 08/28/2012 - 23:21 | 2745587 LetThemEatRand
LetThemEatRand's picture

You are obviously not someone who has studied the law (or even read much about it).  Many individuals are in prison based solely on circumstantial evidence.  

Who are the top 20 contributors of the Mises Institute?

Wed, 08/29/2012 - 00:55 | 2745717 A Nanny Moose
A Nanny Moose's picture

Oh, so you can only engage in personal attacks, and poison well argumentation?

Sucks when your own fucking logical fallacies are used against you, doesn't it?

Tue, 08/28/2012 - 21:21 | 2745316 CrockettAlmanac.com
CrockettAlmanac.com's picture

Ron Paul writes for and associates with the folks from the Mises Institute. Ron Paul also said that Ayn Rand "spoke the truth and people wanted to here it." You voted for Ron Paul. This means that you are linked to Rand and the folks at Mises through Paul. What should we make of that?

Tue, 08/28/2012 - 21:26 | 2745337 LetThemEatRand
LetThemEatRand's picture

Guilty.  As I have said many times before, I voted for Paul because he stands against the police state and military industrial complex, and he wants to end the Fed.  I disagree with many of his other views.

Tue, 08/28/2012 - 21:45 | 2745382 CrockettAlmanac.com
CrockettAlmanac.com's picture

But what does your link to Mises and Rand via Paul imply? You have portrayed these individuals as lying, manipulative corporate shills. You have accused those who appreciate their works of being members of a cult. And yet you think that you can disassociate yourself from these links by the simple disclaimer, 'I disagree with many of (Paul's) other views." Why are you granted the right to appreciate portions of a particular platform or philosophy without being branded a cult member yourself?

Tue, 08/28/2012 - 21:50 | 2745407 LetThemEatRand
LetThemEatRand's picture

I'm starting to understand you now that I see that you don't see the distinction between literally making a living shilling for someone who gives you money in exchange for your writing and advocacy, versus casting a vote for a guy who shares more of your views than the other candidates.

Tue, 08/28/2012 - 22:01 | 2745429 CrockettAlmanac.com
CrockettAlmanac.com's picture

You make no such distinction when you refer to those who support Rand or Mises in ZH forum posts as cultists and shills.

Tue, 08/28/2012 - 22:11 | 2745466 LetThemEatRand
LetThemEatRand's picture

Do you not see the difference between those who blindly follow an ideology and who violently and angrily defend it against all criticism (Rand/Mises shills) versus those who cast a vote for a candidate who supported many but not all of the views of the voter (me)?

Why don't you tell me all of the things you hate about Mises and Rand?

I'll start with Ron Paul:

He is a hypocrite when it comes to his religion.  You can't worship Jesus and think Ayn Rand is all that.

He is completely wrong that private charity would somehow supplant government funded health care.

If we deregulate more, large companies will gain power and the middle class will suffer.

I could go on.  I voted for him because he wants to end the Fed, dismantle the police state, and dismantle the military industrial complex, all of which I favor.  I disagree with many of his views and I would much prefer a different option.

Tue, 08/28/2012 - 22:47 | 2745533 CrockettAlmanac.com
CrockettAlmanac.com's picture

 

Do you not see the difference between those who blindly follow an ideology and who violently and angrily defend it against all criticism (Rand/Mises shills) versus those who cast a vote for a candidate who supported many but not all of the views of the voter (me)?

Who here has done that? Be specific and provide documentation.

 

Why don't you tell me all of the things you hate about Mises and Rand?

I don't hate anything about them. I do disagree with some of the things they've said. Why do you believe that if you do not hate a person you must therefore be a member of a cult which blindly defends that person? If hatred is the criteria for determining who is not a member of a cult and you are not a member of any cult then wouldn't that require you to hate everyone?

 

I'll start with Ron Paul:

He is a hypocrite when it comes to his religion.  You can't worship Jesus and think Ayn Rand is all that.

 

There you go again. You claim that it's OK for you to agree with Ron Paul on some things but not others yet you do not grant Ron Paul the right to appreciate some aspects of Rand's works while disagreeing with others. What's with the double standard that always lets you off the hook for behavior which you find intolerable in others?

 

He is completely wrong that private charity would somehow supplant government funded health care.

You promote elected government because you claim that it will operate according to the will of the people. You also believe that the people do not want to provide charity to others. You want the government to provide this charity in opposition to what you claim is the will of the people. These are contradictory ideas.

Tue, 08/28/2012 - 23:48 | 2745633 LetThemEatRand
LetThemEatRand's picture

"Who here has done that [blindly follow an ideology and who violently and angrily defend it against all criticism (Rand/Mises shills)] ? Be specific and provide documentation."

Come on, really?  

Tue, 08/28/2012 - 23:58 | 2745648 CrockettAlmanac.com
CrockettAlmanac.com's picture

Yeah. Show me the posts that say Rand was never wrong.

Wed, 08/29/2012 - 00:27 | 2745696 LetThemEatRand
LetThemEatRand's picture

I could show you 100+ posts that effectively argue that she was some kind of prophet, but I don't have the energy.  If you don't see that already, I can't imagine that anything I could say would convince you.

Wed, 08/29/2012 - 00:43 | 2745709 CrockettAlmanac.com
CrockettAlmanac.com's picture

If the evidence is so overwhelming then why do you find it impossible to provide documentation? You've got the energy to post unsubstantiated allegations but you can't work up the least bit of interest in presenting evidence that backs them up.

Wed, 08/29/2012 - 00:48 | 2745713 LetThemEatRand
LetThemEatRand's picture

I am unwilling to spend hours compiling the posts for you.  I am pretty sure you've read them, and you either don't see it or don't want to see it.  

Wed, 08/29/2012 - 01:05 | 2745720 CrockettAlmanac.com
CrockettAlmanac.com's picture

I believe that you are mischaracterizing the nature of such posts. In order to show that that is true I need you to present the posts for me to review and critique.

If one makes unsubstantiated claims then the target of those claims can not refute the evidence as no evidence has been presented. If I claimed that you have repeatedly stated that you enjoy eating puppies but I refused to document those statements how would you refute the charge?

Of course most folks realize that those who refuse to present evidence when making accusations do so because no such evidence exists. So please feel free to continue to hurt your own case by refusing to substantiate your allegations.

Wed, 08/29/2012 - 01:10 | 2745727 LetThemEatRand
LetThemEatRand's picture

Except that I'm not claiming that anyone said he enjoys eating puppies.  I'm asserting that -- by context and tone -- many posters effectively see Ayn Rand as Scientologists see L. Ron.  I cannot simply search past posts for examples of puppy eating advocacy. 

Many have tried to prove that Scientology is a cult that should not have religious exemption from taxation.  None have succeeded in the U.S., even though it is obvious to me and most that it is a cult.  I don't expect I'd convince you that many posters here belong to a cult of Ayn Rand.  I don't expect that I could show you that when people reflexively say, "Who is John Galt," that the statement reflects broad brainwashing.  Nor do I care to try.  If you don't see it already, I won't convince you.

Wed, 08/29/2012 - 01:22 | 2745733 CrockettAlmanac.com
CrockettAlmanac.com's picture

You're seeing something that isn't there. That's why you can't document your claims. You can't copy, paste or link to that which exists only in your imagination. The only person around here who is obsessed with Ayn Rand is you.

You spoke of "those who blindly follow an ideology and who violently and angrily defend it against all criticism," and the only example you can provide is someone quoting the line "Who is John Galt?" Where is the anger and violence in making a simple literary allusion? How can you not admit that you have been wildly mischaracterizing what others have said?

Wed, 08/29/2012 - 06:42 | 2745909 tradewithdave
tradewithdave's picture

Have you or do you consider nullification as an option?

Dave Harrison
www.tradewithdave.com

Tue, 08/28/2012 - 22:09 | 2745462 Manipuflation
Manipuflation's picture

Why vote?  You will only end up as a juror in a kangaroo court and will be paid a low wage determined by the state.  As a juror who objects by jury nullification, if need be, you will likely be held in contempt of court.  Voting?  Has anyone here ever been an election judge before?  Let's stick to economics and not politics.

Wed, 08/29/2012 - 06:45 | 2745912 tradewithdave
tradewithdave's picture

Just saw that had been addressed. My bad.

Wed, 08/29/2012 - 06:55 | 2745917 tradewithdave
tradewithdave's picture

Correcting myself, there is a distinction between not registering to vote and registering and participating in a jury pool yet choosing to nullify by judging both the law and the case. Ron Paul himself (Dave is not a supporter) has described it as a last stand of desperation for the preservation of a democratic republic. Just don't expect a judge to include instructions that you have the power to judge the merits of a law.

Tue, 08/28/2012 - 19:32 | 2745040 Cassandra Syndrome
Cassandra Syndrome's picture

Loose conjecture and rhetoric, confirmation biases etc. Heaven forbid if critics of Austrian School economics actual read an Austrian School book.

Tue, 08/28/2012 - 19:39 | 2745058 LetThemEatRand
LetThemEatRand's picture

"I have no intention of adding my voice to the chorus bashing BP. After all, they are one of many companies providing fuel for our cars, generating electricity to power our homes, and enabling so many aspects of our lives today. I could not readily type this short article, and expect to send it to an editor who will read it within a few hours and let me know whether he is interested, without companies like BP.

Instead, I want to illustrate that while BP is being bashed for the company-wide effort to contain its recent spill in the Gulf of Mexico (amidst cries for government to "DO SOMETHING!"), the spill is so difficult to deal with precisely because of government intervention in the marketplace."

one example.  From the Mises website.  BP is a major contributor.  

Tue, 08/28/2012 - 19:43 | 2745068 LetThemEatRand
LetThemEatRand's picture

Another from corporate shill James Miller of the Institute:

"According to a recent study conducted by economists Robert P. Murphy and Brian Lee Crowley, the petroleum industry in Canada “showers benefits across the provinces, and provides outlets for manufactured goods.”  The extraction of petroleum deposits from the oil sands promises to both create employment and boost economic output across the nation.  As long as the companies which engage in extraction are held liable for whatever damage they cause to private lands not under their contractual ownership, Canadians should welcome this technological innovation."

Tue, 08/28/2012 - 19:58 | 2745097 Cassandra Syndrome
Cassandra Syndrome's picture

This is a consultancy paper, what's the big deal? Do you not drive a car? Can you manage to survive without anything that is related to oil?

Tue, 08/28/2012 - 20:00 | 2745102 LetThemEatRand
LetThemEatRand's picture

I guess it would be loose conjecture.

Tue, 08/28/2012 - 20:52 | 2745235 BigJim
BigJim's picture

So.. if someone said this:

"According to a recent study conducted by economists Robert P. Murphy and Brian Lee Crowley, the petroleum industry in Canada “showers benefits across the provinces, and provides outlets for manufactured goods.”  The extraction of petroleum deposits from the oil sands promises to both create employment and boost economic output across the nation.  As long as the companies which engage in extraction are held liable for whatever damage they cause to private lands not under their contractual ownership, Canadians should welcome this technological innovation."

and they weren't receiving funds from BP, it would be a true statment? But because James Miller's Mises Institute receives funds from BP, it's a false statement?

Please explain how that works. I'm sure I'm not the only one here who has trouble with your 'logic'.

Tue, 08/28/2012 - 20:56 | 2745248 LetThemEatRand
LetThemEatRand's picture

He's a corporate shill.  Apologize for him all you want.  I merely quoted him.

Tue, 08/28/2012 - 21:05 | 2745274 BigJim
BigJim's picture

Still waiting... how is the truth or falsehood of his BP-related statement definitively established by whether his institute gets money from BP?

The fact is, because they get money from BP, one should be sceptical when they touch on subjects related to BP's business... but that doesn't prove everything they have to say on such subjects is false, does it? You're not very bright, are you?

By the way... as everyone has an agenda, one should be sceptical about everything.

Tue, 08/28/2012 - 21:31 | 2745341 LetThemEatRand
LetThemEatRand's picture

I'm sure the author of the many Mises articles that appear on ZH including today simply can't tell us, right?  Mises author?  Who are your organization's top 20 contributors?  Care to share or shall your fans be kept in the dark?

Tue, 08/28/2012 - 22:14 | 2745478 Manipuflation
Manipuflation's picture

By what authority should Mises Institute be required to disclose who their donors are?

Tue, 08/28/2012 - 22:38 | 2745488 LetThemEatRand
LetThemEatRand's picture

Intellectual honesty.  If you don't care about that...  Well, I need not say more because you do not.  And you share that characteristic with the Mises Institute.

Tue, 08/28/2012 - 23:16 | 2745588 Manipuflation
Manipuflation's picture

"Intellectual honesty.  If you don't care about that...  Well, I need not say more because you do not.  And you share that characteristic with the Mises Institute."

http://yourlogicalfallacyis.com/

Tue, 08/28/2012 - 23:24 | 2745599 LetThemEatRand
LetThemEatRand's picture

I'm not surprised that you have a "logical fallacy" website at the ready.  You've clearly studied the techniques, including falsely calling out your opponent for engaging in the very techniques you are using. 

Wed, 08/29/2012 - 00:52 | 2745714 Manipuflation
Manipuflation's picture

Did I really make it that obvious?  I apologize, but it seemed neccessary at the time.  I am willing to hear your debate regarding the big L party and it's issues if you are willing hear my debate.(not tonight)  You might find more material there to debate with me about and also help establish a rational discussion of issues.  Fair enough?

Wed, 08/29/2012 - 01:23 | 2745736 LetThemEatRand
LetThemEatRand's picture

I don't belong to the big L party or the big C party, and I don't advocate for either.  I believe in limited government, but I happen to see value in elected government versus the libertarian view.  Any time I'm active here on ZH I will be happy to discuss with you whatever you wish.  For now, I'm going to bed.  I'm on Eastern time.

Wed, 08/29/2012 - 08:06 | 2745975 BigJim
BigJim's picture

  ...but I happen to see value in elected government versus the libertarian view.

er, what? You mean we've been arguing all this time because you think libertarians want unelected governments?

You are seriously confused. "Libertarianism" covers a broad spectrum of thought - from anarchism at one end, to proponents of strong but very limited small-government at the other end, but there is no widespread belief amongst libertarians that governments shouldn't be elected. There is a belief that majoritarian democracy is a disaster, that a government should be limited in what it can do, regardless of what its venal electorate wish to allow it to steal on their behalf.

Can you genuinely not see the difference? After all this time?

This is why I (and others) heap abuse on you - because you routinely deploy false assertions and arguments that have been regularly refuted.

Unless you've got some kind of cognitive impairment, you must be a troll.

Tue, 08/28/2012 - 23:47 | 2745631 malek
malek's picture

LTER starts requesting Intellectual Honesty from others!

I will remind you of that one in due time.

Tue, 08/28/2012 - 23:49 | 2745635 LetThemEatRand
LetThemEatRand's picture

And I shall remind you, sir, that I am rubber and you are glue.  Or vice-versa.  Not sure, but I will remind you in due time!

Tue, 08/28/2012 - 21:05 | 2745276 HardAssets
HardAssets's picture

" What is that based on?"

Ignorance , apparently.

Tue, 08/28/2012 - 19:29 | 2745022 Cassandra Syndrome
Cassandra Syndrome's picture

Austirans are not against Mathematics. As Mises said Mathematics is useful in economics post-factum. Its when complex econometric models are taken as the creed of the dynamics of the market and for forecasting that the Austrians baulk.

Praxeology is the means to understand the concepts of how the laws of economics work. Why then would you have to convert this into an mathematical model, derive a answer and then reinterpret this in English? Use cause and effect logic ffs!!

Economics is a social science and not a natural science. Human action cannot be mathematical modelled as the permutations of the human brain is infinite. The same goes for psychology. No right minded psychotherapist treats his /her patient like a mathematical matrix, they use cause and effect logic.

Tue, 08/28/2012 - 20:44 | 2745217 AUD
AUD's picture

Human action cannot be mathematical modelled as the permutations of the human brain is infinite.

It probably can, its just that you'll get an infinite, or at least a very large number, of solutions.

Tue, 08/28/2012 - 22:42 | 2745540 InconvenientCou...
InconvenientCounterParty's picture

everything can be modeled over some amount time if there are a finite number of variables. The mistake that sophists make is over-estimating the accuracy and effective duration of the model. Economics is not science, it's sales.

Tue, 08/28/2012 - 23:26 | 2745604 Manipuflation
Manipuflation's picture

Agreed.

Tue, 08/28/2012 - 19:29 | 2745024 smiler03
smiler03's picture

Hi John Aziz,

This article is a "big fail". Both articles either side of this have had roughly ten times more reads than this one.

The title isn't exactly rivetting. 

But who cares, readership means nothing ;O)

Tue, 08/28/2012 - 20:03 | 2745107 XitSam
XitSam's picture

Gold, bitchez!

Tue, 08/28/2012 - 20:40 | 2745201 Roandavid
Roandavid's picture

Ahhhhh!

Back to reality.

Tue, 08/28/2012 - 19:30 | 2745030 Cassandra Syndrome
Cassandra Syndrome's picture

BTW - Rothbard was a Mathematical genius as a nipper.

Tue, 08/28/2012 - 20:53 | 2745239 geewhiz190
geewhiz190's picture

he may have been, but in my conversations with him I thought he was a jerk

Tue, 08/28/2012 - 21:09 | 2745290 HardAssets
HardAssets's picture

<delete jerk-like statement in response>

Why ?  serves no purpose

Wed, 08/29/2012 - 08:08 | 2745994 BigJim
BigJim's picture

 ...he may have been, but in my conversations with him I thought he was a jerk

It's the vast array of evidence you marshalled to support your assertion that persuaded me!

Tue, 08/28/2012 - 19:32 | 2745041 roadsnbridges
roadsnbridges's picture

Value is subjective - just like food.

Tue, 08/28/2012 - 19:39 | 2745048 roadsnbridges
roadsnbridges's picture

There are others outside of Libs.

Third, I subscribe to the notion that human thought is neither linear nor rational,

 

http://www.wnd.com/2008/11/56494/

Tue, 08/28/2012 - 19:38 | 2745052 CunnyFunt
CunnyFunt's picture

Very poor.

Tue, 08/28/2012 - 19:39 | 2745056 Joshua_D
Joshua_D's picture

You know, if you don't know what you're talking about, you shouldn't try to pretend you do.

Tue, 08/28/2012 - 20:26 | 2745159 ThirdWorldDude
ThirdWorldDude's picture

Exactly! Aziz contradicts himself when he claims he subscribes to notion 1 (different people with different valuation systems) and notion 3 (human thought is non-linear and irrational), but still pushing for empirical data gathering..

Even if you gather data it would be worthless to use as an input or a backup of a further deduction, simply because the data gathered on human behavior gathered from a sample, doesn't necessarily create a pattern (look at notions 1 & 3) unless you have acquired data from all the representatives of the system. Good luck with that!

Tue, 08/28/2012 - 19:41 | 2745061 Quinvarius
Quinvarius's picture

Oh look, hidden Schiff bashing supported only by strawman arguments about seperations in technique that don't exist.

Yes, you finally admit Schiff was right.  But you deny he can pull it off again because this time is different.  This time the fantasy is real.  Whatever Schiff did using both reason and behavior studies was just a fluke last time.  Right?

Plus, don't ever use the word "wrongheaded" as an insult instead of bringing some facts to the table.  It is like wearing a bow tie.  No one trusts people that wear bow ties--And with good reason.

Tue, 08/28/2012 - 19:46 | 2745073 AurorusBorealus
AurorusBorealus's picture

This is a very important article despite what the commentary says.  It is good to see some folk starting to rethink the methodology of economics, because this is precisely where the problem lies in economics... dogmatic adherence to theories without regard for fact.  Political economy must return to empiricism if is to do anything other than grave harm to all human endeavor.

Tue, 08/28/2012 - 19:57 | 2745093 Manipuflation
Manipuflation's picture

You mean like, "I will trade you this item for that item" and if we both agree, because we agree on par valuation based upon our own needs or wants, then a transaction occurs?

Instead we get this sort of stuff:

 

Tue, 08/28/2012 - 21:17 | 2745307 Palmer Eldritch
Palmer Eldritch's picture

Empiricism in the social sciences is exactly what got us into this mess. The repudiation of reason and the lack of understanding of the limits to observation have been used to confuse and confound. 

Baffle 'em with BS until they give in... that's modern political and economic thought.

 

ta,

Tue, 08/28/2012 - 19:46 | 2745075 gwiss
gwiss's picture

John,

I would invite you to "prove" that tripling the money supply doesn't lead to hyperinflation.  Go ahead.  Use Japan as an example.  How exactly are you going to "prove" that?  Are you under the impression that "Japan" is actually an entity?

If you believe so, then you are woefully confused.  See, "Japan" only refers to a particular collection of individuals.  And, when you use the term "Japan does X", then you are constructing a linear interpretation of history for an entity that does not exist.  Instead, you are attempting to create a narrative of a dynamic process, but this can never become anything more than a hypothesis, because there remain a massive number of uncontrolled variables amongst this mass of individuals.  You can never "prove" anything about this collection of humanity, because you will never be able to run a controlled experiment.

Thus, the best you can do is to understand the pressures and motivations that force the inviduals to act, and if you can understand that, then you have a chance at predicting the behavior of the larger system that emerges from the collective choices of these individuals.  But, this is the thought process behind how Mises operated.  He didn't ignore data.  Instead, he did not simply look at one particular statistic, make the sophomoric mistake of confusing correlation with causation, and then proceed to pretend that he had actually "proved" something.

Sure, some prominent Austrians have been wrong about how the economy would function under state control, because they underestimated the capacity of the State to mask and obfuscate and obstruct the natural process of cause and effect.  They weren't wrong, just early.  And, as Doug Casey says, "just because something is inevitable doesn't mean it is imminent."  There is plenty of learning to be done about the intricacies of how Central control can screw up natural processes.  But, the procedure there is to ttempt to understand the process, which cannot be done by brute force numberizing.

Tue, 08/28/2012 - 22:27 | 2745513 OneTinSoldier66
OneTinSoldier66's picture

You rock gwiss.

Wed, 08/29/2012 - 06:33 | 2745902 AnAnonymous
AnAnonymous's picture

Fantastic! If Japan does not exist as an entity, what makes the State exist as an entity?

Only 'Americans' have this knack at stating one thing and an incompatible thing in the same breath.

Wed, 08/29/2012 - 12:24 | 2746839 akak
akak's picture

 

Only 'Americans' have this knack at stating one thing and an incompatible thing in the same breath.

Then you, AnAnnoyingMouse, are the king of all 'Americanism Americans', as you have repeatedly (and quite insanely) stated that the devastating environmental and societal collapse of Easter Island around the year 1600 AD was the result of "US Citizenism", although it happened almost two centuries before the USA was founded as a nation, and decades before the first European settlers even landed in what is now the USA --- not to mention more than a century before the Easter Islanders had even had their first contact with the outside world.

Insanitation, thy name is AnAnnoyingMouse.

Wed, 08/29/2012 - 07:14 | 2745933 tradewithdave
tradewithdave's picture

Are you suggesting that there can be a successful attemp to "understand" the free will, either yours or another's? I would propose that will not be possible and why therefore the goal is to get incrementally closer and closer to attempting to appear to influence free will through technology based behavioral economics or libertarian paternalism.

Dave Harrison
www.tradewithdave.com

Tue, 08/28/2012 - 20:20 | 2745086 michigan independant
michigan independant's picture

http://www.jesushuertadesoto.com/fronts/humanaction.pdf A society that chooses between capitalism and socialism does not choose between two social systems; it chooses between social cooperation and the disintegration of society. Socialism is not an alternative to capitalism; it is an alternative to any system under which men can live as human beings.

 

Tue, 08/28/2012 - 20:12 | 2745108 e-man
e-man's picture

So if an event doesn't happen when I say it will happen, it means that the event will never occur, and I was wrong?  And it doesnt' mean I was incorrect on the timing?  Interesting analysis.

i.e., 2+2 must =4 right now or 2+2 does not =4??????

Tue, 08/28/2012 - 20:18 | 2745145 blunderdog
blunderdog's picture

Too dumb for science.

Tue, 08/28/2012 - 20:07 | 2745117 linrom
linrom's picture

Using his power of deduction, Peter Schiff came up with the revolutionary economic theory called de-coupling--a theory based solely on his application of Austrian economic principles. According to this theory, China would continue to develop and grow at breakneck pace, while US would perish in witches brew of hyperinflation and dollar collapse--there is no income tax and little business regulation in China, the Austrians cheered. Unfortunately for many of his followers, they suffered some of the most astounding financial losses in history.

Post-Keynesian economists never bought into this silly economic reasoning.

Tue, 08/28/2012 - 23:41 | 2745620 malek
malek's picture

While I agree that the de-coupling theory was a naive view based on interpolating trands into the future, and maybe also showing that no immediate roadblocks exist to such,
amazingly you and many others fail to give the reader a single point what Peter Schiff missed.

The most important in my view:
The justice system in China doesn't live up to its name and the Chinese all know it.

Tue, 08/28/2012 - 20:10 | 2745126 adr
adr's picture

The problem is deriving your conclusions from data that is based on faulty research and assumptions. There is not a single set of data from the federal government you can trust as fact.

If you studied housing data from 2000 to 2006 you would not be wrong in the assumption that home values would continue to increase. The data available supported that hypothesis.

Only by using logic outside studying forces outside the data, could you have deduced the market was about to collapse. In fact someone using sound logic would have seen the bubble form at the very beginning.

The housing bubble was very easy to see from any common sense logical point of view. The problem is most of the world has lost this sense, blinded by the pure greed involved in the boom bust cycle.

To me it was very logical to conclude that the rapid increase in home valuations was unsustainable. When I was told in 2004 that a home in my area would triple in value over the next ten years. My answer to the realtor was, $1 million for 1500 sq ft in a $35k median income city good luck with that. Anyone of sound mind should have come to the same conclusion as me, it would be impossible to support such a price when the only prospective buyers would be making a lower middle class salary. However many people would have taken the realtors word for it and handed over their hard earned cash expecting to make a fortune.

There is no free lunch, even though every Keynesian has tried to convince us that there is. The more you group people, the dumber the collective becomes. The more you rely on a collective compromise for action, the less action will be taken. A group of people is only as smart as the dumbest person in the room. The larger group of people will always vote for the worst possible of the given choices. That is why our republic was set up with the concetration of power as far away from a central collective as possible. If local town A made a bad decision it would not take down towns B-Z. This seems to be such simple logic, yet most do not understand this. Logic must not be a widely shared trait.

When data is manipulated the only tool we have left is sound logic based on experience. Intelligence is not being able to form large equations and spit out numbers to support a hypothesis. Intelligence is using experiene and observation to figure out which paths will lead to the wrong conclusion, so as to lead to the proper path without having to choose wrong before you find yourself right.

Keynesianism is going down every wrong path in the hope that one of them turns out to be right.

Tue, 08/28/2012 - 20:27 | 2745134 treasurefish
treasurefish's picture

I was very interested to read this article, but found it difficult to digest because of the "big words" peppered throughout.  I was thinking that maybe I am just too stupid, but then I realized that you're just totally full of shit!

 

Deduct this biotch:

1.  Your earlier quote:  "(continued from Mises quote)This is completely wrongheaded. All human thought and action is derived from experience; Mises’ ideas were filtered from his life, filtered from his experience. That is an empirical fact for Mises lived, Mises breathed, Mises experienced, Mises thought. Nothing Mises or his fellow praxeologists have written can be independent of that — it was all ultimately derived from human experience. And considering the Austrian focus on subjectivity it is bizarre that Mises and his followers’ economic paradigm is wrapped around the elimination of experience and subjectivity from economic thought."

Does not jive with your later quote, homie:

 

2.  "Praxeologists claim that praxeology does not make predictions about the future, and that any predictions made by praxeologists are not praxeological predictions, but instead are being made in a praxeologist’s capacity as an economic historian."

 

Also, your panty ruffling quote, "I produce a deductive hypothesis — for instance, that the end of Bretton Woods might produce soaring income inequality" is for pussies.

BTFD

Tue, 08/28/2012 - 20:17 | 2745144 blunderdog
blunderdog's picture

Syllogistic deduction doesn't work if you can't define your propositions.  Most economists never define the propositions, so you're stuck with vague "sounds right" kinda stuff that can't be clearly and specifically tested.

Any proposition that can't be tested and confirmed is worthless when it comes to logical conclusion and/or predictions for the future.

The theory may sound great, and it may align with recorded data for awhile, but you have to be prepared to scrap the thing when it fails.

A good example would be "tax cuts create jobs."

We had major tax cuts in the early 'aughts, and no jobs were created.

Another good example would be "affirmative action reduces racism."

It's been in effect in various institutions for decades, but racism remains omnipresent and quite healthy.

Theory failures.  Time to try another approach.

Tue, 08/28/2012 - 20:20 | 2745149 Manipuflation
Manipuflation's picture

I think I have an idea how to get some inflation going.  Simply repeal this law:

"On October 3, 2008, Section 128 of the Emergency Economic Stabilization Act of 2008 allowed the Fed to begin paying interest on excess reserve balances as well as required reserves."

 

Tue, 08/28/2012 - 20:36 | 2745186 Nostradamus
Nostradamus's picture

Yet Miseseans including Peter Schiff damaged their hard-earned credibility with a series of failed predictions of imminent interest rate spikes and hyperinflation of the dollar by 2010.

Mr. Aziz,

If you watch the video that you link to, Peter does not say that the dollar will hyperinflate by 2010.  In fact, he states that hyperinflation will not happen in 2010, but could happen in 2012, 2013, 2014.  Please get your facts straight.  

Other Austrians, like Von Greyerz, and John Williams of Shadowstats.com, believe we will see hyperinflation, but, of these two, only Williams has gone out on a limb and given a hard date of 2014 for the hyperinflation to begin manifesting itself in the U.S.  Even today, Schiff is still not convinced himself that we will get hyperinflation because he believes that the FED still has time to reverse course.

 

Tue, 08/28/2012 - 20:38 | 2745194 New American Re...
New American Revolution's picture

This authors problem is that he is getting hung up on economists, when he should be getting hung up on political scientists.   Economists can only take you so far and then they leave the realm of reality.   Political scientists are not given their proper place in the mix because they are not economists and so their value is questioned.   The job of the political scientist is to introduce the social and economic structure of the different political disciplines available, which isn't too hard as they are comprised of either liberty or one of the many ism's of tyranny.   From there, the social and economic models take over and render economists impotent to deal internally with their meaningless formula's that try to extrapolate the accelerating dynamics of quantitative physics, where the ability of mathematical models to react to stimuli increases in scale of failure to exponentially react to the action and reaction time of the stimuli, leaving all mathematical formula's in their wake, as they are always a step behind.  

In other words, read the fucking Constitution and Declaration of Independence and extrapolate the common sense.   It might not make a pretty formula, but it works.

Tue, 08/28/2012 - 20:46 | 2745223 DavosSherman
DavosSherman's picture

"Second, I subscribe to the notion that free markets succeed because of the sensitive price feedback mechanism that allocates resources according to the real underlying shape of supply and demand "

Show me one free fucking market.

The money side of supply and demand is the 900# gorilla.

Shit read.

Tue, 08/28/2012 - 22:26 | 2745511 treasurefish
treasurefish's picture

My kid's lemonade stand was a free market....until it got shut down for supposed health violations by city officials.  So there!

Tue, 08/28/2012 - 22:57 | 2745559 Shell Game
Shell Game's picture

Bitcoin

Armslist.com

 

There's two for ya..

Tue, 08/28/2012 - 20:48 | 2745229 stika
stika's picture

azizonomics, oh yeah! still a lot to study dude!

Tue, 08/28/2012 - 20:52 | 2745234 stika
stika's picture

and don't forget to take max keiser along with you in the classroom! go to Madrid, Huerta de Soto will teach you all you need! 

Tue, 08/28/2012 - 20:53 | 2745236 Nostradamus
Nostradamus's picture

BTW Mr. Aziz,

Gary North, whom you mention in comments on your website, is an Austrian who has recently come out against the hyperinflation prediction because he believes the FED will reign it in so that the banks do not lose all of their dollar denominated loan income.  North believes that the U.S. will eventually default on its bond payments.  Just because you're an Austrian does not automatically mean you are a hyperinflationist.  In fact, almost any Austrian would tell you that if the FED were to raise the FED funds rate to 5.0% tomorrow, we could avoid hyperinflation and instead go the route of formal default.  However, the chances of that happening, as everyone knows, are practically 0.00%

Tue, 08/28/2012 - 21:13 | 2745299 Palmer Eldritch
Palmer Eldritch's picture

North has been arguing against hyperinflation for years.  This is nothing new for him, he just writes so much he tends to repeat himself on occassion to update everyone of how big a bad ass he is.

It's too bad, John showed such promise. But, he's just another example of the adage that it's better to be thought a fool than to open your mouth and remove all doubt.

 

ta,

 

Tue, 08/28/2012 - 21:24 | 2745327 tu-ne-cede-malis
tu-ne-cede-malis's picture

Seconded.

Do NOT follow this link or you will be banned from the site!