Freedomain Radio

In one of the recent podcasts I seem to remember you saying that Austrian economists are "nerds".  And also insinuating that they are wasting their time and maybe their theories are just useless.

I would like some clarification on just why you think this.

I think I'd like to hear this, could I trouble you to cite the podcast so I could hear it in context? Thanks,

Dave

August 17th Sunday Show

Stef's called himself a nerd/geek multiple times.

My friends and I call each other nerds/geeks. Not necessarily a bad word.

Would you rather be called the opposite - a jock?

I haven't heard a podcast where he says those things.  But let me try to explain what I think he means:

He wouldn't argue that economics has no use.  Clearly, for many people it has valuable. 

But Stef's point is that the majority of the world doesn't base it's decisions on efficiency, projected effects or economic models, but on it's sense or right and wrong.

So the best way to change the world is by teaching them to apply their innate sense of morality to the State. (and Religion and Family)

As we both know, for many people, economics is too abstract.  But everyone can understand the fact that you shouldn't use violence to get what you want. 

I don't think the Austrian economics people should ditch economics, but should add the Argument from Morality to their arsenal.  It's extremely effective.

And, isn't the Austrian model based on the NAP anyway?  I don't see a need for a split.

Well, I cannot recall the exact circumstances of the phrase, but if I had to guess as to what I meant, it would probably go with something like this...

When you look at the discipline of economics over the past few hundred years, as compared with the progress in other sciences such as medicine, nutrition, physics -- and even psychology -- it seems fairly clear that relatively little to no progress has been made in practical terms. Free trade, subsidies, government power, high taxation, public education, socialized medicine, centralized control of the currency and the economy -- state power as a whole -- have all gotten far worse over the past hundred years or so.

The main reason for this I believe is the fact that free-market academics loudly and perpetually proclaim their love and respect for the free market, while staying as far away from it as humanly possible, which makes their policy recommendations pretty much a ludicrous series of pathetic jokes. ("Everyone else must submit themselves to the discipline of the free market; we must keep our tenure, our sabbaticals and months off in the summer! )

If you are interested in this topic, I write about it in more detail in my free book Everyday Anarchy.

I have read an enormous volume of literature and material from free-market economists -- but I have never once read even the remotest suggestion that academic philosophers should band together, ditch their state protected union, and sell their services on the free market.

This astounding and fairly contemptible gap between theory and practice is probably what I was referring to.

Does that help at all?

 I understand.  And I understand the unfortunate situation of professionalized economics.

I've read Everyday Anarchy and I think it is a powerful work.

Thanks - can you tell me what you mean by 'unfortunate'?

Economics was pretty much ruined somewhere in the ninteenth century by the decision to bring it to academia (which was the first time economists recieved wages I believe).  And how it has developed (into the math formula based nightmare it is today) is fairly apparent to anyone who has had the displeasure of being in any economic course. From my experience, I believe academia is far worse than popular literature on economics -- though both are written by economists, usually.  Though economists can generally be more enjoyable in rational debate (you don't have to argue against out and out socialism with virtually anyone anymore, for instance).

Also, I think you have to be sure to separate market anarchism from the classical liberals who have existed for hundreds of years.  And free trade and property rights talk with the logical conclusion of market anarchism.  It is not surprising that classical liberals were rejected and free trade/property rights were rejected.  If they believe them for wrong reasons as Adam Smith and maybe even John Locke did.  They weren't teaching good ideas, but bad ones.  Even Hayek made a huge mistake of taking some seemingly correct ideas and giving into the demands of the statists... by working with their own flawed terms instead of working from actual truth.  Milton Friedman had hardly any good ideas and the way he explained them were often times correct and often times leaving huge holes open for the statists to exploit -- it is not surprising he worked with Nixon.  It wasn't beneath his dignity or removed from his own principles.  If he thought the EPA, controlling the money supply, and giving people negative income taxes (except those that need their money to be with-held) were legitimate government functions, I don't see how he really thought much that was done by the Republicans was bad.  It wasn't that he was working within the system that was bad, it was that he had no interest in anything but the system existing.

I believe the development of free market ideas themselves have become more consistent and much more radical with time.  It's not only the methods that have changed.  Which is important as I don't believe any really intelligent conscious free market anarchists existed until about fifty or less years ago (at least to my knowledge).  I don't think free market anarchists have been trying to get through for hundreds of years.  They simply did not exist whatsoever in order to do so.  Mises is a huge improvement over anything before him by leaps and bounds.  And I think Mises did several things that were outside of economics to make exchange and psychology and logic, etc. an irreducible subject matter in the form of praxeology.  Which I think is invaluable to the goal of establishing that our position is not one of preference or desired effect (or worse:  class interest), but really a part of human nature, the extension of rational investigation, and so forth.  And obviously Rothbard is an improvement over Mises (to the position of anarchism).  I do not know if Rothbard figured that his teaching post at University of Las Vegas would bring anarchist revolution.  If he did, indeed, then he would be wrong.  But his written work is invaluable for two reasons:  it is radical enough for those who intuitively love liberty and it is readable/enjoyable enough to keep laymen out of academia and still understand great economic and philosophical truths.

Though, maybe you mean the average writer at mises.org and lewrockwell.com that harps on fed-induced business cycles, minimum wage, and price theory, etc.  Which I agree is ineffective (even if they may agree with the bigger picture and are ineffective).

As a side note

I would like to know what you think about Austrianism as 'deductive' or a priori vs. what you say economics is:  as a demonstratable or in need of proof.  I don't understand how one can prove economics in the scientific sense.  Mises stated rightfully I think that economic causal factors cannot be disentangled.  For instance, someone could say that Canada's socialist system is what allows their wonderful wealth which would then allow new technologies like podcasting.  And then if podcasts were nationalized, it would be a dilemma.  Noam Chomsky is still certain that computers were created by government and could not possibly have existed in a free market (which would be so "full of hate it wouldn't be worth living in").  Though, I agree with you that is of important to prove ethical theories and philosophy.

That is an interesting question -- I think that the discipline of economics would be virtually nonexistent in a free market, although there would be a few statisticians and economic predictors working for DROs and currency companies.

The discipline of economics at the moment seems to be largely focused upon trying to influence government policy -- in the absence of the government, it is hard to imagine what economists would actually do (or pretend to do).

I of course agree that the modern statist school system is rather unfortunate, horrible. But given the vast number of people that are highly influenced in the university system, I would much rather there be free-market thinkers on the inside than not.  Free-market and libertarian thinkers opting out of their university jobs out of protest would not be a positive step towards freedom, IMO.

Um, Jimmy - what about me? Do you think I could have done FDR if I were in economics.

Basic rule of economic thinking - always look at what is missing, not what is present...

I just put you and FDR in a different league Stef. I seriously do. 

I do think it's a muli-faceted movement though. I mean would you be where you are without Hazlitt, Rothbard, Hayek, etc.? Perhaps you would. But the many people who get turned on to the freedom path, and who end up here, might not. 

Given the circumstances I want more liberty oriented people in the education system adding some counterweights to the socialists. I don't personally see how all the free-marketeers jumping ship would contribute to spreading the ideas of freedom. In our world today, you almost HAVE to enter into the university system to get ahead. And most people will do so. It seems horrible, to me, to think about the next few decades of students never hearing about these ideas and being even further brainwashed into the statist paradigm.

 I could be wrong of course. Does that makes any sense?

OK, so economic theory would have reached a zenith in a free society?

SInce the likes of Rothbard, Hayek, von Mises, etc. were only human, then surely it's possible for flaws to be uncovered in their theories.  Even after the likes of Rothbard, Hayek and von Mises have died, Austrian economics has evolved and diverged into a few sub-fields.

I'd think this is true of all the scientfic disciplines (well economics is a social science at least).  We wouldn't think well today of a physicist in the 18th century who stated that Newton's theory was the apex of understanding in physics.

I was wondering about this the other day.

Are economists the type of -ists that get paid like geologists and chemists.  Or are they the type of -ists that believe in the superiority of one thing over other things like racists and sexists?