Comments (34)

• Anthony

  I've been meaning to buy Friedman's book, if not just to educate myself further in neoclassical economics.

  Published: August 9, 2007 7:16 AM

• adi

  I think that both Neoclassical theories deal with the sort of 'Ideal Types' that dont exactly have one-to-one relationships with their empirical counterparts.

  It's just that Robbins defined economics being based on choice theoretic foundation; ends are given, means are the interesting question.

  Hicks and Allen essay on Reconstruction of theory of value and Hicks book Value and Capital reveals something about what kind of axioms or postulates are needed so that economics could be practised by using calculus and other sorts of math.

  Published: August 9, 2007 8:00 AM

• Paul Marks

  Indeed, the article is correct.

  Many human objectives are very complicated (that does not mean that economic principles, along with other principles, do not apply to them).

  And there are sometimes many different ways of achieving the same objective.

  A person may also not only be choosing between many methods (which will achieve his objective) but inventing new methods of achieving objectives.

  Published: August 9, 2007 9:11 AM

• Don Lingerfelt

  I just read this article and though I like David Friedman, the points are well taken. I agree with most of them. One point made came up yesterday in a lecture by Dr.Long at he Mises University I listened to. The question is one I have been struggling to answer for years. It was stated that studying the past cannot predict anything in the future, nor can we infer any "Law" by studying the past. If this is so, why study economics? Is it just to understand some things that happened in the past more clearly, for our own benefit? Does it render useless any practical application for economics (save for teaching it)? I think that in mass, people will do things that are predictable a priori to some extent at least, as we can't know every individual's incentives or marginal valuations. The question is one of extent intended by the statement that the future actions are not predictable. I am very interested in feedback.

  Published: August 9, 2007 9:12 AM

• ktibuk

  "Further, "efficiency" is relative."

  No it is not.

  As far as I know efficiency is about means, and given an end, efficiency is not relative but tied to the one thing in this universe that is actually scarce, time. Everything else being equal the quickest you reach an end more efficient you are. And that everything else can be reduced into time.

  Rationality can not be judged by the ends that are chosen, at least regarding economics since objectivist moral philosophy judges ends, bur the means that are chosen.

  What separates humans from animals is that they can make more complex causal relations and of course having a better memory helps.

  So basic humans are all rational not just they are all purposive but use the same hotwired way of using their brain.

  At least thats what I think

  Published: August 9, 2007 11:07 AM

• RogerM

  Don: "It was stated that studying the past cannot predict anything in the future, nor can we infer any "Law" by studying the past."

  I can't speak for Dr. Long, but here's my understanding of things. When Austrians say that we can't discover laws by studying the past, I think they're responding to the methodology popular in economics in which economists start with a blank slate and study history to discover economic "laws". Mainstream econ borrows this method from the natural sciences where, for example, scientists will try to approach data without a pre-existing theory and build theory from the data. Both Mises and Hayek taught that we have to approach history with well-formed theories in order to make sense of history. We can't just gather together a bunch of historical facts and hope that good theory will pop out and become obvious. Austrians build theory by studying human nature and using logic. The difference in methods may seem small, but the differences in results are huge!

  Obviously, Austrians make a lot of predictions. They predict that if the central bank lowers interest rates below the natural rate that business people will make mistakes in investments on a wide scale. They predict that these investments will raise employment and, as a result, demand for consumer products. Since the first consumers haven't reduced consumption, Austrians predict that the increased demand will cause prices to rise. When prices rise and wages don't, real wages are lower, so Austrians predict that businesses will use more labor and less capital. But Austrians didn't achieve these insights from studying history, but from studying human action.

  By the way, most Austrians, except for Hayek, are allergic to econometrics, but those predictions are what one person has called "poor man econometrics." In other words, they're verble econometric equations. For example, saying that lower interest rates will induce greater investment in capital intensive industries is the same as saying that my dependent variable is investment in capital industries and my independent variable is interest rates. I can then use historical data to create a simple regression equation that will estimate the strength of the relationship. Several people have done this with aspects of Austrian econ.

  Published: August 9, 2007 12:46 PM

• Don Lingerfelt

  Thank you for responding.
  I should say that I am also a "technician", one who reads charts to read the market. I predicted a month ago the start of a Bear, which turned out to be wrong as there was a secondary new high. Then I again predicted the start last week (the day before the big drop. I then predicted the secondary rally to 13,800, and it got to 13,769 (error about .22%). This tells me that within a certain margin of error; we can know what will happen. To be totally forthcoming, I also use Austrian Business Cycle Theory to determine when the major tension points are. I think we should start to see a rise in unemployment soon which breaks the down trend. I think that the recession should start in 6 months. However, I know that things could change and I could very well be completely wrong.
  Even with this, I am still convinced that the Austrian school is right on the money theoretically. But still the question remains: of what practical value is the study of economics if it cannot be used to predict?
  

  Published: August 9, 2007 1:48 PM

• Mark Humphrey

  To Don Lingerfelt: We study economics for the broad purpose of understanding the nature of social processes and conditions necessary to the greatest production of wealth. Austrian School economics teaches us that state coercive intervention in free market processes distorts the conveyance of information, warps incentives, and destroys wealth. In a sense, good ecnomics explains that free markets are natural and lead to human flourishing; state regimentation is unnatural and yields suffering. In summary, we study ecnomics to learn the nature of the social order that is most conducive to the production of wealth by its members.

  
  As concerns forecasting, Harry Browne wrote about the "near impossibility" of using economics to predict the future. I was a long time Browne "follower", but I partly disagree with Browne's agnosticism. One can use insights from economics to identify big errors or disturbances or discontinuities in investment prices, not with precision, but with adequate prescience to make informed guesses at broad turning points. Browne bought gold at $35, precisely because he understood economics. His understanding informed him that 40 years of gold price controls combined with 40 years of state monetary depreciation, was bound to produce much higher gold prices.

  I don't think charts tell one much about future price behavior, although lots of sucessful speculators rely on charts for inspiration. I do think that support and resistance levels help one define short term risks, because those levels inspire buying and selling based on the desire of people to correct past mistakes. I also agree that we're in a bear market, headed for a recession.
  

  Published: August 9, 2007 2:52 PM

• Brian Gladish

  My view is that economics will (actually has, but not everyone is listening) teach us that we don't need a state. After that it will boil down to the study of market and entrepreneurial action as there will be no policy to guide. A number of non-Austrian economists have already commented that if the Austrians are right economists in general are out of their jobs.

  Published: August 9, 2007 3:22 PM

• Don Lingerfelt

  Mark and Brian,
  Thank you both. I can agree with both of you and appreciate the answers. On technical analysis, I am convinced that it is by far the most accurate way of determining the state of the market, though not necessarily the economy. I have used it with a lot of success for many years now and cannot find a more effective means of analysis, though I have tried. It was the attempt that brought me to Austrian Econ in the first place, and I'm not sorry that I did. I just need to keep the two in their place, knowing what each is useful for. I think that you have really answered my question. Thank you again.

  Published: August 9, 2007 3:44 PM

• Jesse

  Don Lingerfelt: "But still the question remains: of what practical value is the study of economics if it cannot be used to predict?"

  There have been some good responses already, and I don't disagree with them, but I think an important point has been omitted. Namely, unlike in physics or chemistry or any other kind of "hard" science, the fundmental elements in economic theory are people. People have hidden internal state, and learn from past behavior. Simply put, you can use economics to predict behavior, but those predictions become invalid as soon as the subjects become aware of them. Knowledge of the prediction changes the outcome; consequently the system is naturally chaotic, and unpredictable in the long term.

  For the purposes of stock-market analysis this fact probably doesn't matter much, since you're merely trying to detect the early warning signs of changing prices. Essentually your analysis helps you to recognize the fact that other entrepreneurs already see the good as under- or over-valued and thus join in before most of your competitors. By the time your predictions are generally known they are no longer predictions per se, since the events are in the past.

  It has far more significant ramifications for those that would attempt to twist economics into a means of control by means of currency manipulation, price controls, regulations, etc. These measures are put into place on the basis of economic predictions, but as soon as the measures are revealed the predictions they were based on become invalid. See also: the law of unintended consequences.

  Published: August 9, 2007 4:26 PM

• Anthony

  I agree with most of what Mark said. Austrianism essentially studies the pure science of economics - and in so doing, it utilises certain a priori true axioms and some other empirical facts. This is sufficient for devising economic theory. As others have said it has some predictive power, and in addition, bad theories that cannot explain certain phenomena are discarded for ones that are more capable of doing so. Prediction in general in the market and an explanation of why economic actors act the way they do are the function of econometrics and thymology respectively; they have nothing to do with pure economics, except insofar as they borrow from it.

  This article is quite illuminating on the Austrian method:

  http://www.veritasnoctis.net/docs/aristotelianapriorism.pdf

  Published: August 9, 2007 5:26 PM

• Mark Humphrey

  Jesse, I don't want to start a brawl, but I have to disagree with your statement that "you can use economics to predict behavior, but those predictions become invalid as soon as the subjects become aware of them."

  Economics does not enable one to predict behavior. How could it? People are individuals endowed with free will. One can never predict with certainty what someone else might choose. If one knows the other intimately, then knowlege about that person's character and history will help to predict his behavior sometimes. But never with certainty. Knowlege about character and personal history isn't economics; it is psychology.

  As concerns broad turning points in the business cycle, or housing or stock or bond prices, one relies on economic analysis to grasp that a particular change of uncertain magnitude and timing will take place. But one's ideas about when and how big derive not primarily from economics, but more from one's observations of human behavior. When prices that one expects to fall are bid up to dizzying heights---the NASDAQ at 5,000, silver at $50, Manhatten brownstones at $50 million--and one infers that the bidding behavior that yielded those prices is unlikely to be sustained, one can posit that the peak may have been reached.

  This proposition partly reflects some economic analysis--i.e. money is tight, and the bidding that produced the high prices is based on the misconception that prices will continue to rise, even though the monetary inflation that caused the rise has largely ceased; therefore the bidding won't be sustained in the future.

  But the proposition that prices are about to fall, and by what amount, is more heavily influenced by one's observations about other people: perhaps they're unanimously enthusiastic about high prices, so they've probably all already long; perhaps they're clearly getting overextended, as measured by various financial statistics, so they probably can't sustain the rate of buying that has pushed up prices; perhaps other alternatives are emerging in the market that will undercut demand; and so forth.

  The observations about people that lead one to conclude that prices are about to fall is not primarily a product of thinking about economics; it's much more a product of thinking about the circumstances of other people in the market. And the process of making judgements about other people, their circumstances, and their likely future behavior, falls under the heading of entrepreneuerial activity.

  Published: August 9, 2007 5:46 PM

• ktibuk

  Economics can't give us the answer about the ends the indivduals take, specific goods they demand etc. So speculating on the price of a good, whether stocks commodities and such are beyond economics realm.

  But economics knowledge can give us info on time preferences.

  Since time preference is universal it can be agregated. All goods have competitors as where the given money stock will chose to go, but time preference is there and there are two major state.

  High and low.

  And we know interest rates suppose to reflect aggregate time preference. But we also know current inflation pushing the interest rate down.

  So the money and credit will have to contract sooner or later.

  What you all need to do is borrow as much as you can with these low rates for long term and keep the funds liquid on short term assests, shortest term interest bearing investment.

  Thus when the money supply contracts and interest rates rocket, you can make a killing.

  That is what economics tells me.

  Published: August 9, 2007 6:07 PM

• Eric

  I think there are too many absolutes being thrown around. To say that humans are unpredictable and therefore one cannot predict their future actions, does not distinguish between certainty and probability.

  I cannot predict with certainty because humans do not act like physical elements. But even in the physical world we cannot predict with certainty. Quantum mechanics is all about that uncertainty. But it can provide probabilities, and sometimes the probabilities are so close to 1 as to be essentially certain.

  I think that we can predict with better than random guessing in many cases.

  Another item is the statement that theories were created without looking at historical data. How do we know that for sure. We'd have to be able to examine the theorists mind to know for sure. I think that a mixture of history and axiomatic thinking must occur. Otherwise, how would one know for sure even that humans act, if not by observation. If I was alone in the world and had never observed other human beings, how would I be able to infer that they act? How would infer that I even act without having considered my past actions?

  Published: August 9, 2007 6:11 PM

• Ardalon

  I practice Objectivism and now I know with certainty that if there are individuals like yourself and the Mises Institute is alive and well, then the world will always be safe from the David Friedmans and it will always belong to ones such as us.

  Published: August 9, 2007 7:05 PM

• Anthony

  Eric, please read the paper I provided when you have time. It explains how Austrian theories are derived.

  Published: August 9, 2007 8:02 PM

• RogerM

  Don: "But still the question remains: of what practical value is the study of economics if it cannot be used to predict?"

  I think Austrians do use economics to predict things. If nothing else, they predict that socialism will always fail. What Mises and Hayek had a problem with was point forecasts, such as forecasting that the GDP will grow 3.2% next year, which are called quantitative forecasts. Mises had no problem with qualitative forecasts, such as forecasting that lower interest rates will spur investment.

  I think there is a middle ground, which Hayek seems to stake out, where you can make quantitative forecasts but with reasonable margins of error. That's how I was taught to use statistics. Quantitative point forecasts are almost always wrong, and when they're right, it's by accident. But solid statistical analysis can give an expected value and a range of values in which you can be 95% or 90% confident that the forecast will fall within that range.

  Both Mises and Hayek opposed a technique that has come be called "data mining", in which an analyst uses machine learning programs, such as neural networks, to sift through enormous data sets looking for unexpected correlations. Statisticians, by the way, have always opposed data mining, too. Good statisticians never approach a data set without a good theory to test on the data. That's the same way Mises and Hayek approached history, too.

  The methodology in mainstream econ is exactly the opposite of sound statistics and Austrian methodology. They prefer to mine the data and use the correlations they find to assemble some kind of theory. But they often fail to perform tests for spurious correlations and to determine if the correlation is stable over time.

  As for forecasting the stock market, I think you have a valid approach. The shorter the time periods involved, the more random the data appears. I have found that forecasting quarterly averages for many things is possible, but even monthly data becomes too random. It seems to me that technical analysis is best for the shorter time periods where the psychology of the market is most important. Fundamental analysis works well for identifying longer trends, but often misses the big turning points. That's where Austrian econ fills in the gaps with its qualitative forecasts.

  Kyosagi, of Rich Dad Poor Dad fame, wrote that good investors pay attention to the longer term cycles of the economy so that they can sell before the top and have cash to buy at the bottom. The stock market responds to the economy. So yes, Austrian econ can help forecast the economy and therefore the stock market, but primarily for the longer term.

  Published: August 9, 2007 10:51 PM

• Sergei Kureda

  Austrians do use economics to predict things. If nothing else, they predict that socialism will always fail.

  When will it fail? Tomorrow, in 70 years time, in 7000 years time? Everything will eventually fail, so such a prediction contains zero information.

  A meaningful prediction would say something like "if 50% of workforce works for government, there are 90% chances that in 10 years time average life expectancy would drop by 10%".

  I think that not using numbers is the major problem with the Austrian approach.

  Published: August 10, 2007 1:29 AM

• TGGP

  The article does not understand the standard definition for rationality which is Bayesian rationality. It is of course inevitable that people will make errors. The problem is if they systematically make errors, then we say they are biased. You can find a list of cognitive biases here: http://en.wikipedia.org/wiki/Cognitive_biases
  One of my favorite blogs often discusses these. It is at overcomingbias.com and if you are not reading it now please kick yourself.

  Published: August 10, 2007 2:50 AM

• Anthony

  Sergei, it isn't entirely true that Austrians do not use mathematics in certain predictions. There is a growing branch of Austrian macroeconomists (neo-Austrians) who do some mainstream reasoning tools in crafting their predictions. But this, again, is not to generate economic theorems; it is based on them.

  Published: August 10, 2007 6:54 AM

• 哈根达斯

  thanks.

  Published: August 10, 2007 10:34 PM

• RogerM

  Sergei:"When will it fail? Tomorrow, in 70 years time, in 7000 years time?"

  Austrians predict that socialism will always fail to accomplish its expressed aims. For example, a book by Hayek that I was reading recently showed that Soviet economists knew as early as the mid-1930's that socialism had failed them, and would continue to fail.

  Sergei: "I think that not using numbers is the major problem with the Austrian approach."

  Not all Austrians have been opposed to putting numbers to their theories. Hayek is a good example. And as Anthony writes, some contemporary ones use statistical analysis.

  But I can understand why many Austrians are reluctant. Economists are incredibly sloppy with regression analysis, their favorite technique. Freekonomics is a good example. The author regressed the number of abortions on crime and concluded that abortions have reduced crime. Had he checked, he may have found that relationship to be a spurious correlation. That was his first mistake. His second mistake was misspecifying the model. In other words, he didn't include other significant predictor variables, such as the use of private security, the aging of the population, increased wealth, changes in law enforcement, increased use of concealed weapons by citizens, and other factors. Had Freekonomics included any of those other explanations for the reduction in crime in his model, he might have found that the abortion variable became insignificant. Such abuse of statistical techniques is a good reason to avoid their use all together.

  Published: August 10, 2007 10:49 PM

• Anthony

  Well said Roger. The crucial thing to understand is that the Austrian School uses a different method for devising its theories - it is not hostile to empirical studies (quite the contrary) nor is it against replacing faulty theories; but not the way the mainstream economists do.

  Published: August 11, 2007 8:14 AM

• Eric

  Again, too many absolutes. Socialism is used in the absolute, yet even in the Soviet Union, it never existed absolutely.

  Mises said that socialism would fail primarily because it had no price system. But that's not entirely true. They had global prices to go by and they had many black markets as well.

  So, unlike a theory, the world is not a complete whole and this makes it quite difficult to use pure logic to develop a theory and then try to use predictions and history to demonstrate how the theory has relevance to the actual world we live in.

  Anthony, I read, well tried to read, that article you recommended. Unfortunately, it makes references to too many other authors in the sense of a philosophy. That might be ok as a term paper where there's a context of the a semester, to be able to understand what is meant by those terms (such as Aristotelian thought) but there are simply too many possible meanings and therefore I could not follow the paper. It is the same problem I find with Mises's Human Action. It is quite difficult to read by itself. I think most people that did not know him personally don't read his writing directly, but rather read other works, by say, Rothbard. I myself do this. One could say I will never learn the true meaning of Mises in this way, but then neither will his ideas spread if they require a "Mises made easier" reader (like the one by Percy Greaves). However, I did find RogerM’s thoughts to be illuminating. And my point was the absoluteness of the statement that Austrians don’t use history to produce theorems.

  Published: August 11, 2007 2:04 PM

• Anthony

  If there are inherent problems in an economic system that violate economic laws, statements containing absolutes are justified. Mises, referring to a price system, meant one based on private property - any other price system would end up being artificial and arbitrary. And as for "pure logic", Austrianism does not use it, except at its most fundamental levels. I appreciate that you cannot go through the article I provided right now - but it does point out that Austrianism is far from "pure logic" (indeed, it in many ways is far more realistic in its approach to markets than neoclassicism.)

  Published: August 12, 2007 7:08 PM

• Eric

  This is the problem I have with Austrian theory. At times, they scorn any use of numbers, but at other times, when useful, they get used.

  For example, I was asked by a friend for something Austrian to back up Ron Paul’s call for disbanding the FED system. I went back to 2 sources to see if I thought he could understand them. In listening to the .mp3 files up on Mises on the "case for a 100 % gold dollar" here is Rothbard complaining that

  ...when Misesian forecasts (about the price of gold after 1971) proved right - that gold would not go to a value below $35 - Rothbard refers to this as a laboratory experiment, and says "Did he (Friedman, the elder) or they, graciously acknowledge their error and hail Mises and his followers for being right?"

  So, here, is Rothbard himself, now using data following a prediction to demonstrate the truth of his and Mises theories.

  And here is a quote I don’t follow, in a footnote in Rothbards’s book on the Depression:

  “This is by no means to deny that the ultimate premises of economic theory e.g., the fundamental axiom of action, or the variety of resources, are derived from experienced reality. Economic theory, however, is a priori to all other historical facts” – from footnote 4 in the introduction.

  It seems as if he wants it both ways here. Maybe I just don’t really understand his use of “a priori”. The premises and axioms come from experience, but the theory precedes or works on its own without any need for facts? But a theory based on logic begins with axioms and then proves other results based on those axioms, no?

  Published: August 12, 2007 9:17 PM

• Anthony

  A couple of misunderstandings on your part; first, Austrians are anything but averse to using statistical facts to demonstrate the workings of theories. Second, the scorn Austrians pour on neoclassicists is because they proceed to derive theorems from statistical regression - this is problematic, because facts cannot explain themselves, and without a preceding theory they can be interpreted any way. Good neoclassicists (e.g. Friedman, his QTOM is aprioristic), in spite of their rhetoric, do use a good deal of apriorism. Thirdly, the axioms are a priori, i.e. irrefutable and precede all empirical facts. But they are only one component of the Austrian method - several theories use empirical facts in addition to the axioms. So when Austrians refer to correcting bad theories they refer both to flaws in the deductive reasoning as well as fallacious empirical data (so, they use inductive and deductive reasoning, inductive being defined as in the paper I provided.) Austrians will never use empiricist methods (what the paper I gave refers to as 'retroductive') to derive a theory - and this is what Mises meant,- but they will use empirical data nonetheless, and will correct bad theory. Like I said, Austrian macroeconomists often use a good deal of maths - on top of the core theories though. A theory using the appropriate empirical facts and correctly deduced will indeed be irrefutable. I hope this helps.

  Published: August 13, 2007 5:41 AM

• Anthony

  Forgot to add: aside from the axioms, certain of the base theorems are also apriori true (e.g. law of demand and supply), although which qualify is a matter of debate (e.g. time-preference - see Block and Hoppe on this.) Both Rothbard and Block favour(ed) extensive use of empirical studies to build on Austrian theory.

  Published: August 13, 2007 6:31 AM

• Don Lingerfelt

  These are all good concepts, and are all well hashed in various articles and lectures on Mises.org. The one thing I think has been avoided or decried is the use of numbers in the practice of Austrian Economics, which is now being discussed. I think that if Austrian theory states an a priori theory such as the business cycle cause (a reduction in the money supply; an increase in the rates of interest; etc), we should see this in the numbers. Since I am prone in this direction, I've done this and lo and behold, we are in the midst of just such an occurrence. I don't think that we can make a theoretical statement that something must happen in case something else happens, and it not be provable in real life. If the facts conflict with the theory, then the theory must be invalid or we haven't taken another fact into account (the theory is flawed). I totally with the theory and I am finding the facts bear this up as well, to my great joy.
  Another point, concerning the purpose of economics being proof that freedom and free enterprise being the best system for an efficient economy: I think we are generally convinced of this (though not all people are). The problem I see in this country is that we are, as a country, obsessed with telling others how to live their lives. I am amazed at the reaction of people when something bad happens: they all want laws written to prevent such and such from happening in the future. The politicians believe that they are required to write as many laws as possible, mainly to loot the people as quickly as possible and to remove as much freedom as possible toward the inevitable end of totalitarianism. Both parties are in this mode, with few exceptions. Mises predicted this is the way it goes and he was right. If this is so, then how do we convince those who have the power that our conclusions are proper? Are we wasting our time in this study if those who would most benefit reject freedom, both politicians and citizens?
  

  Published: August 13, 2007 10:37 AM

• Don Lingerfelt

  Talk about coincidence! The top media lecture right now is chapter 26 of Rothbard's book where he discusses the ability of Praxeology to recommend to society a proper direction. He quotes vonMises and in some points disagrees with him on the ability of Economics to recommend a political/moral direction, as this is an ethical decision on the part of the poeple, to be determined by the marginal utility and time preference of the majority of those citizens. Mises stated it is not the purpose of economics to make these ethical judgements, but it is the perview of the people to determine what outcome they wish to achieve. This outcome may be to kill all the redheads or anything else. At this point I think that the founders make a wise choice in establishing a Constitutional Republic which protects the minority from the majority. I wish we still had this form of government.

  Published: August 13, 2007 11:51 AM

• Anthony

  Don, I'll agree that if a theory systematically fails to explain certain phenomena, it needs to be re-examined. That is for sure. Theories are there to interpret facts, and thus (unless they are at an axiomatic level) must be able to explain them well.

  Some additional material for those interested:
  http://www.amazon.com/Rational-Economic-Man-Hollis/dp/0521033888/ref=sr_1_1/104-6738989-7722325?ie=UTF8&s=books&qid=1187047301&sr=8-1

  http://www.amazon.com/exec/obidos/tg/detail/-/0415365422/ref=ord_cart_shr/104-6738989-7722325?%5Fencoding=UTF8&m=ATVPDKIKX0DER&v=glance

  http://mises.org/journals/qjae/pdf/qjae9_2_4.pdf

  Published: August 13, 2007 6:23 PM

• RogerM

  Don: "If this is so, then how do we convince those who have the power that our conclusions are proper?"

  That's a very good question! We seem to be doing a poor job so far. One answer that I've been promoting for a while is to get Austrian econ off the internet, out of books and journals and on to television. Except for John Stossel (sp?) television promotes socialism every hour of the day. Most voters have not gone to college, and those that did weren't taught Austrian econ. For the most part, Austrians are preaching to the choir. To change society, we need to get into the marketplace where the majority of Americans are, and that's on TV!

  Published: August 13, 2007 7:26 PM

• David Friedman

  "I've been meaning to buy Friedman's book, if not just to educate myself further in neoclassical economics."
  

  
  You don't have to buy it, and probably can't--Price Theory is long out of print. But you can read it online for free at:

  http://www.daviddfriedman.com/Academic/Price_Theory/PThy_ToC.html

  Or you can buy Hidden Order, which is the same book rewritten for the intelligent layman rather than the college student.

  Published: September 4, 2007 12:10 PM