tag:blogger.com,1999:blog-26706564.post7413125726363608730..comments2024-03-25T07:51:47.758-04:00Comments on Thoughts On Economics: On The Lack Of Persuasiveness Of Austrian-School EconomistsRobert Vienneauhttp://www.blogger.com/profile/14748118392842775431noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-26706564.post-49281969295903517112012-02-09T04:09:05.844-05:002012-02-09T04:09:05.844-05:00Robert,
Hopefully my two cents on the subject of ...Robert,<br /><br />Hopefully my two cents on the subject of rationality will be of some interest:<br /><br />"Rationality = Methodological Individualism" http://aussiemagpie.blogspot.com.au/2012/02/rationality-methodological.htmlMagpiehttps://www.blogger.com/profile/07528637318288802178noreply@blogger.comtag:blogger.com,1999:blog-26706564.post-31454252710554053712012-02-08T10:04:14.450-05:002012-02-08T10:04:14.450-05:00Philip,
I'm not sure I agree with you. But, I...Philip,<br /><br />I'm not sure I agree with you. But, I, too, find myself agreeing today with an Austrian school economist, namely <a href="http://thinkmarkets.wordpress.com/2012/02/02/rationality-isnt-always-rational/" rel="nofollow">Mario Rizzo</a>.Robert Vienneauhttps://www.blogger.com/profile/00872510108133281526noreply@blogger.comtag:blogger.com,1999:blog-26706564.post-79834361096085471792012-02-07T08:24:22.513-05:002012-02-07T08:24:22.513-05:00For I think the first time in my life I think I ag...For I think the first time in my life I think I agree with an Austrian -- or at least the sentiment expressed. Any sort of 'theory' of choice is probably nonsense when you drill down.<br /><br />Even when sophisticated psychological experiments are used it is far too difficult to separate out the 'choice' made by the subject and the influence of environment in which the choice was made.<br /><br />There is no basis on which to begin a realistic appraisal of Man except by assuming that he acts freely. And if we accept that he acts freely we must acknowledge that we cannot construct an apparatus which will explain his future free acts. These are very old philosophical arguments that go back to the 19th century at least -- if not further.<br /><br />Does accepting them mean that microeconomics is doomed? Maybe.Philip Pilkingtonnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-81135319664838852332012-02-05T04:54:25.524-05:002012-02-05T04:54:25.524-05:00Thanks Robert,
I did not know of the quote you pr...Thanks Robert,<br /><br />I did not know of the quote you provided ("You cannot go from the informal to the formal by formal means"), but that is the gist of my comment.<br /><br />I fully agree with your opening remarks on uncritical acceptance and misleading characterization.<br /><br />Where I have some doubt is here: "Without more widespread correction of such defects, advocates of the Austrian school should not be able to persuade many economists, both orthodox and heterodox, of the worth of their views."<br /><br />Correcting those defects potentially could leave little of Austrian school economics (at least in its Misean variant, that I am more familiar with).<br /><br />Besides, I don't think Austrians really care much about convincing scholars about the worth of their views. I suspect they are more interested in the wider public.Magpiehttps://www.blogger.com/profile/07528637318288802178noreply@blogger.comtag:blogger.com,1999:blog-26706564.post-90220636989008407712012-02-01T09:24:23.194-05:002012-02-01T09:24:23.194-05:00Thanks for the comment, stickman.
Magpie, I did t...Thanks for the comment, stickman.<br /><br />Magpie, I did think of quoting Edsger Dijkstra in the original post. He said something like, "You cannot go from the informal to the formal by formal means". I've previously touched on why I think neoclassical utility theory may be more complicated than textbook simplifications. But generally I agree with your contrast.Robert Vienneauhttps://www.blogger.com/profile/00872510108133281526noreply@blogger.comtag:blogger.com,1999:blog-26706564.post-21519391810475311332012-01-30T02:33:39.323-05:002012-01-30T02:33:39.323-05:00You touch an interesting subject in this post.
Le...You touch an interesting subject in this post.<br /><br />Let's compare the axiomatic base of neoclassical ordinal utility, which, as you pointed out, is what's required for decision problems that do not involve random outcomes (i.e. those forming the bulk of neoclassical microeconomics):<br /><br />1. Axiom of Preference<br />each comparison of any two bundles A and B of goods and services results in one of:<br />(1) bundle A preferred to bundle B (A P B)<br />(2) bundle B preferred to bundle A (B P A)<br />(3) indifference between bundles A & B (A I B).<br />( P : "is preferred to")<br />( I : "is indifferent to")<br /><br />2. Axiom of Transitivity<br />if A P B and B P C then A P C.<br /><br />Whether one agrees with those two axioms or not, they have two desirable properties: (i). One can deduce all results in household demand theory from them; (ii). They are clearly, unambiguously stated (and, because of that, they can be empirically tested).<br /><br />Compare this state of affairs with Mises' action axiom:<br /><br />"HUMAN ACTION IS PURPOSEFUL BEHAVIOR. Or we may say: Action is will put into operation and transformed into an agency, is aiming at ends and goals, is the ego's meaningful response to stimuli and to the conditions of its environment, is a person's conscious adjustment to the state of the universe that determines his life. Such paraphrases may clarify the definition given and prevent possible misinterpretations. But THE DEFINITION ITSELF IS ADEQUATE AND DOES NOT NEED COMPLEMENT OF COMMENTARY". (Human Action, Chapter 1. Acting Man; Section 1. Purposeful Action and Animal Reaction. My emphasis).<br /><br />Clearly, Austrian economists can easily deduce all their own household demand theory from Mises' action axiom. That is, it has property (i), too. The link below [*] shows how some use the action axiom to deduce their results (a warning: the examples could be unfair, but it was impossible for me to assess the credentials/knowledge of those providing the "proofs").<br /><br />But it is undeniable that the axiom itself is neither clear, nor unambiguous: it does not satisfy property (ii). Incidentally, that's why the first chapter of Mises' book is entirely spent explaining it.<br /><br />One such axiom cannot be put to empirical test.<br /><br />In defense of Austrian economists, I will say that Austrian economics is broad, and I understand, in some senses quite heterogeneous, and perhaps (I am guessing here) some of them might use a, to put it bluntly, more serious axiomatization.<br /><br />[*]http://mises.org/Community/forums/t/24572.aspxMagpiehttps://www.blogger.com/profile/07528637318288802178noreply@blogger.comtag:blogger.com,1999:blog-26706564.post-42224221479691556792012-01-29T08:46:01.679-05:002012-01-29T08:46:01.679-05:00I left two comments in the actual thread of Unlear...I left <a href="http://unlearningeconomics.wordpress.com/2012/01/27/some-scattered-thoughts-on-austrian-economics/#comment-727" rel="nofollow">two</a> <a href="http://unlearningeconomics.wordpress.com/2012/01/27/some-scattered-thoughts-on-austrian-economics/#comment-763" rel="nofollow">comments</a> in the actual thread of Unlearning Econ's post that take issue with exactly the same thing. <br /><br />This is not to pick on Mattheus; I like to think that our previous interactions have been pleasant and productive affairs. However, this whole ordinal vs cardinal utility debate is a bizarre non-controversy that has been allowed to persist for far too long.<br /><br />To state the entirely obvious: Austrians will struggle to gain any kind of traction with other economists if they insist on clinging to demonstrably false distinctions like this.Grant McDermotthttps://www.blogger.com/profile/11868318397832070394noreply@blogger.com