Comments (7)

• Tom

  I've been trying to get a friend to appreciate the Mises site and Austrian theory in general. His latest response to me follow, and I wish to respond to its points accurately - with the help of someone who can explain the fundamentals that start with Menger (if you have the time to just share a couple of remarks - would be most appreciated). Thanks greatly for your attention. His latest:
  "The argument that govt intervention to lower interest rates is undesirable needs to be challenged, I believe. Have long felt that Greenspan's obsession with fighting inflation that did not exist by raising the bank, prime and inter-bank rates was wrong and unfair to the middle class which ended up paying historically high home interest rates (>4% in real terms corrected for inflation) and explains much of the working and taxpaying class stagnation of the 1990s and beyond. Now, when Bernanke lowers those rates, the Austrians protest.
  
  You know more about Mises but I think that his ideas are, like the Federalist Papers, wonderful touchstones but limited because they do not take into account new technologies and certainly the global, supranational maretplace of today. In college I studied MicroEcon -- the theory of the firm. I also studied MacroEcon, but Macro in 1960 really meant a national economy (because international trade accounted for but 4% of the GNP or GDP). Now we have a world economy to deal with. We also have technology tools that permit more knowledge and more rapid understanding of what is happening. Central governments back in 1912 had very little information at their fingertips; today we know by 6 Feb what happened to retail sales in January.
  
  At heart a conservative, I believe in the smallest government and least government intervention we can get away with. Unfortunately, it does little good to rely on Adam Smith in business cycles, John Commons in labor theory, or Mises in financial economics to deal with today's world problems. They do serve as clarifiers in Econ 101 or in an Econ Theory, or History of Economic Thought classroom."
  

  Published: February 8, 2008 2:05 PM

• Inquisitor

  See my response on mises.com. :P

  Published: February 8, 2008 3:49 PM

• fundamentalist

  Tom,
  Your friend's response is typical of those educated in Keynesian econ. Basically, he is put off by Mises because his writings are dated. He thinks that the world is too different today for Mises's insights to apply. It's an emotional attachment to modernity and discounting of older things simply because they're older. It's not a rational argument. You might try having him read some modern Austrians, instead, such as Kousen or Garrison or Reisman. Those authors clearly demonstrate that they understand the modern world as well as anyone and Keynesian econ, too.

  Published: February 8, 2008 8:25 PM

• fundamentalist

  Tom,
  That author is Skousen, not Kousen. His "The Structure of Production" is great!

  Published: February 9, 2008 11:26 AM

• fundamentalist

  Tom,
  Just one more thought. Your friend may be under the illusion that modern economics includes all that is good from the past and has proven wrong all the bad ideas. That is the illusion that the Harvard economist Greg Mankiw holds to, which is why he won't read anything Austrian either. But you'll find that modern economics, which is Keynesian econ, refused to consider anything that contradicted the Keynesian paradigm. It's not that they analyzed Austrian econ and found it lacking. For the most part, they didn't even understand it. They rejected Austrian econ because they either didn't understand it or they simply ignored the truths that made them uncomfortable.

  The idea that the present is always superior to the past is amazing in its arrogance. The past has a lot of great truths that were never proven wrong, just ignored, or sneered at.

  Published: February 9, 2008 11:35 AM

• champthom

  This is totally awesome. Frankly, I'd love to see more study guides for Austrian classics. I have a copy of Robert Murphy's "Man, Economy, and State" study guide and that's quite a good one, and I await for his one of "Human Action."

  Then again, I'm peculiar like that. But personally, I find that study guides like that tend to make sure I get the main points down and supplement my reading.

  Published: February 9, 2008 2:12 PM

• kaxahdan

  I downloaded the other day and am still reading it.

  What's particularly valuable to me is the comments that the summarizer made on each part of the chapters. The comments are often longer than the summaries themselves, but they are very incisive and subtle--extremely useful for beginning self-learners and advanced students.

  So in one word, superb! Congrats.

  Published: February 12, 2008 9:16 PM