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So, these Austrian guys, from what I remember, are uber-free market capitalists and are a strong intellectual foundation for the modern day Libertarian movement. The guy who was giving the lecture was a prominent economist of the Austrian school himself, he’s called Murray Rothbard. The talk is really lively and entertaining and I love the way the guy talks, he just has everything together in his head. The content of the talk itself centered on the on the the life of von Mises and Hayek and how they developed their theories in Europe and how they finally got to the US and got support there.
It all got me thinking about how we learnt about them in Colander’s class. I knew a bit about Hayek and his theory about how socialism would never work because only through markets can the vast amounts of information required about the resource allocation problems of an entire society be processed naturally and efficiently. But I only remembered Mises as a passing reference. But apparently he was the intellectual father of the Austrian school…
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Rothbard’s talk was so great. It’s amazing there’s all this stuff that was saved. It’s as if he just gave that talk. Great stuff. Hoefully that student will learn that the mathematical models are useless for theory. Re: the de-socialization conference – I’m sure the Lithuanians caved and established a central bank. Still, great, great stuff from Rothbard.
After reading the original post, I wonder what you have to say about his comment about Austrian economists differing from conventional, modern economists by refusing to use mathematical models and the like to prove their arguments.
Here’s what the post author, Yan, said:
“without mathematically consistent models, let alone empirically testable ones, economics degrades from a science to a bitchfest of who can have the most ridiculous theory imaginable.”
Is this true? Does he have a point about empirical testing, what do you think? Interested to hear your views.
David, the subjective theory of value, which is central to Austrian economics is incompatible with empirical testing since it makes it impossible to conduct rigorous experiments.
People are not like masses of lead. People’s tastes vary from person to person, or vary over time. Thus, it is impossible to set up an experiment where two identical groups A and B, both having identical sets of subjective value scales are subjected to identical enviroments with only one controlled variable altered.
Tarran,
Thanks for the response.
Personally, I’m attracted to many of the Austrian viewpoints because they seem grounded more in common sense than most of what is taught under the banner of economics these days. For me, much of the modern economics seems overly dressed up in models and formulas in an attempt to pass it off as hard science rather than philosophy (for lack of a better term).
What you’re saying then is that the Austrians’ central view of how people value things and make decisions negates any attempt to model/formulate economic decision-making and trends?
David,
There are other problems you might not be aware of. There are certain currently fashionable ideas you may have uncritically absorbed from the educational establishment. For example, the notion of “hard science” vs. social science. The Austrians claim that Austrian theory is “hard” and demonstrable truth. Austrian theory is in no way ad hoc and so is more than just common sense. To truly understand it, you have to understand the method and thus why it is a) provably true but b) not some sort of “natural science” redux.
I would suggest reading Murray Rothbard and Ludwig von Mises on method. Then you’ll understand why Austrians differ from contemporary mainstream economics; why the latter are essentially ad hoc speculators; and why Austrian theory has such great explanatory value.
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