Thursday, August 25, 2011

Keynes and Pyramid-Building: What He Really Meant

Here is a passage in Keynes’s The General Theory of Employment, Interest, and Money that his opponents repeatedly misrepresent:
“When involuntary unemployment exists, the marginal disutility of labour is necessarily less than the utility of the marginal product. Indeed it may be much less. For a man who has been long unemployed some measure of labour, instead of involving disutility, may have a positive utility. If this is accepted, the above reasoning shows how ‘wasteful’ loan expenditure may nevertheless enrich the community on balance. Pyramid-building, earthquakes, even wars may serve to increase wealth, if the education of our statesmen on the principles of the classical economics stands in the way of anything better.

It is curious how common sense, wriggling for an escape from absurd conclusions, has been apt to reach a preference for wholly ‘wasteful’ forms of loan expenditure rather than for partly wasteful forms, which, because they are not wholly wasteful, tend to be judged on strict ‘business’ principles. For example, unemployment relief financed by loans is more readily accepted than the financing of improvements at a charge below the current rate of interest; whilst the form of digging holes in the ground known as gold-mining, which not only adds nothing whatever to the real wealth of the world but involves the disutility of labour, is the most acceptable of all solutions.

If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.” (Keynes 2008 [1936]: 1936: 115–116).
What is notable is that the hordes of commentators on this passage supress the important qualifications:
Pyramid-building, earthquakes, even wars may serve to increase wealth, if the education of our statesmen on the principles of the classical economics stands in the way of anything better.

It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.”
The assumption behind these comments is an economy suffering from
(1) severe depression or
(2) high involuntary unemployment and idle resources.
It is not an economy at full employment. In other words, we are talking about the terrible conditions of the 1930s when there were armies of unemployed and idle plant in many capitalist nations. Keynes’s solution of deficit-financed public works spending faced opposition from the neoclassicals of his day who held the so-called “Treasury” view.

Keynes’s assertion that even wasteful public loan expenditure might “serve to increase wealth” in such times was his way of shocking contemporaries into seeing that effective demand drives output and employment, and that even wasteful spending would tend to raise production and employment in conditions of idle resources, insufficient demand and low private investment. In fact, Keynes could have added that even wasteful private investment or spending would have done the same thing. In such an economy with high involuntary unemployment and idle resources, any failed or wasteful private investment is essentially in the same category as the government having people dig holes in the ground, but no one doubts that this private activity raises output and employment while it is in progress.

But the whole point of the passage is precisely that that we do not want wasteful public loan expenditure, and that it is the incompetence and stupidity of neoclassical theory held by many economists and policy makers that prevents the necessary public investment in useful spending programs.

Keynes did not seriously advocate pyramid-building, wars or digging holes in the ground as a method of stimulus. His preferred method was the equally misunderstood solution of the “socialisation of investment”:
“By ‘socialisation of investment’ Keynes did not mean nationalisation. Socialisation of investment need not exclude ‘all manner of compromise and devices by which public authority will co-operate with private initiative’ ... This single throw-away line in the General Theory reflects Keynes’s thinking on ‘public-private partnerships’, which came out of his involvement in Liberal politics in the 1920s (Skidelsky, 1992, chs 7 and 8). In essence, he sought to expand the public-utility component of investment to give greater stability to the investment function. Today, he would have seen the big institutional investors like pension funds as a major support for stability. A guaranteed stream of investment would reduce fluctuations to modest dimensions, which could be readily controlled, if so wished, by speeding up or slowing down elements in the investment programme. Such investment would not necessarily be profit-maximising. But provided it yielded positive returns, there would be a gain. If markets had perfect information, public investment would be inefficient. But with uncertainty, there is a gain as against having no state investment at all, because of the losses due to uncertainty.” (Robert Skidelsky, “The Relevance of Keynes,” January 17, 2011).
BIBLIOGRAPHY

Keynes, J. M. 2008 [1936]. The General Theory of Employment, Interest, and Money, Atlantic Publishers, New Delhi.

Skidelsky, R. J. A. 1992. John Maynard Keynes: The Economist as Saviour 1920–1937, Macmillan, London

61 comments:

  1. I think we understood it all the first time. Burying the bottles and digging them up is better than doing nothing, right? We got that. What a load of crap.

    http://www.flickr.com/photos/bob_roddis/4163003939/in/set-72157600951970959

    ‘Socialisation of investment’ doesn’t mean “nationalization”, just a public/private partnership, right? Sounds fascist and corporatist. I think we got that one the first time too.

    http://www.flickr.com/photos/bob_roddis/4426636401/in/set-72157600951970959

    There is no problem of involuntary unemployment in the market. The problem facing humans is war, genocide, government theft and a boom/bust cycle caused by government interventions. Keynesianism eviscerates in theory and practice the protective barriers put up by private property and due process of law against such universal abuses to “cure” a problem that does not even exist. And it’s not funny.

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  2. "‘Socialisation of investment’ doesn’t mean “nationalization”, just a public/private partnership, right? Sounds fascist and corporatist. I think we got that one the first time too."

    Fallacy of composition.

    (1) public/private partnerships were present in fascist states.
    (2) the modern UK and US have public/private partnerships
    (3) Therefore, the modern UK and US are facisst states.

    Learn some basic logic, you idiot.

    You might as well argue that because fascist states had standing armies, therefore all modern states with standing armies must be fascist too.

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  3. Wow, Keynes was a bad writer. I had to read the paragraphs you quoted three times in order to understand what he is saying.

    Basically, general opposition to wasteful public spending leads to search for other second best solutions during recession. Search for other second best solutions leads to even more wasteful choices in public spending. Is that it?

    I guess it is sort of like America, where search for "market-based" "reforms" has led to horrendous, complicated creations such as cap-and-trade, ACA, or Bush's Medicare expansion. J. M. F. Catalan has actually said that a straightforward system of government-run hospitals would have been better than the bloated public-private bureaucracy mix with all sorts of perverse incentives and contradictory regulations that prevail in American medicine today.

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  4. ""‘Socialisation of investment’ doesn’t mean “nationalization”, just a public/private partnership, right?"

    Wrong, socialisation of investment means both

    (1) direct government public spending programs on public works/infrastucture/social spending, and
    (2) public/private partnerships

    So you can't even get that right.

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  5. "There is no problem of involuntary unemployment in the market."

    Given that the type of free market system you advocate has never existed in the real world ever, where is the empirical evidence for this?

    Oh that's right! Empirical evidence doesn't matter when you have an aprioristic system as false as Leibniz's Monadology.

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  6. "‘Socialisation of investment’ doesn’t mean “nationalization”, just a public/private partnership, right? Sounds fascist and corporatist. I think we got that one the first time too."

    Fallacy of composition.

    Hahahahaha. that isn't fallacy of composition you idiot. Fallacy of composition occurs when someone infers something is true for the whole system that is in fact true for only part of the system. Roddis didn't do that.

    Roddis just correctly pointed out that public/private partnership style of "socialization of investment" sounds corporatist/fascist. Economic corporatism occurs when special interest group businesses and governmental collude to form partnerships.

    That is not a fallacy of composition.

    (1) public/private partnerships were present in fascist states.

    In fascist states, most or all businesses are controlled or partnered with the state. The more there are, the more fascist the society becomes.

    (2) the modern UK and US have public/private partnerships

    The UK and US contain fascist elements.

    (3) Therefore, the modern UK and US are facisst states.

    Non-sequitur. Most or a substantial portion of all businesses would have to be controlled or partnered with the state in order for "the US" to be considered fascist. The same reason why even though money production is communist in this country, as the state owns and controls the means to produce money, it doesn't follow that "the US" is communist. Most or all of the means of production would have to be owned by the state before one could call "the US" communist.

    Learn some logic you moron.

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  7. ""‘Socialisation of investment’ doesn’t mean “nationalization”, just a public/private partnership, right?"

    Wrong, socialisation of investment means both

    (1) direct government public spending programs on public works/infrastucture/social spending, and

    (2) public/private partnerships

    So socialization of investment includes.....SPENDING. What an idiot. Government spending is not an investment. Investment is an expenditure for the purposes of making subsequent sales (profit). Government spending is a consumption.

    Furthermore, it is silly to split "socialization of investment" into two groups. It's all one group. All government spending for roads, bridges, etc, require private businesses to build them. The government, after all, does not have its own construction company. They have to PARTNER with construction companies who will build the roads and bridges, using taxpayer money. They have to agree on location, size of project, money costs (prices), time horizon, etc. So "government spending" AND "public/private partnerships" are the same thing. Corporatism.

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  8. "There is no problem of involuntary unemployment in the market."

    Given that the type of free market system you advocate has never existed in the real world ever, where is the empirical evidence for this?

    That is not how economics works. You Keynesians don't even practice what you preach. You claim that Keynesian spending should not take place if there is full employment and no idle resources. You make arguments assuming no unemployment and no idle resources. That has never existed in the world ever, and yet you feel free to advocate for spending whenever there is unemployment and idle resources, as if full employment and no idle resources is possible.

    Economics is not a historical data science. There is only one set of historical data that we all consider. By your asinine methodology, if the entire world were free market, and there were no governments, and thus no government spending and no inflation, then it will be impossible for any Keynesian to make their case, since it cannot be observed anywhere.

    In addition, in the real world today, no matter what happens, no matter how much government spending or inflation takes place, Keynesianism is a non-falsifiable doctrine. It is also a priori.

    No matter what happens, if unemployment rises or falls, if production rises or falls, the Keynesians will always refer to a counter-factual world to make their case. "Unemployment rose? That means in another world where the government inflated and spent more, unemployment would have been lower. That means there wasn't enough Keynesianism, and we're right. Unemployment fell? That means Keynesianism is working, and we're right.

    In other words, Keynesians use a priori reasoning to explain historical data, just like the Austrians. The only difference is that whereas Keynesianism is full of contradictions (Keynes' marginal efficiency of capital doctrine contradicts Keynes' multiplier doctrine), Austrian economics is not.

    Oh that's right! Empirical evidence doesn't matter when you have an aprioristic system as false as Leibniz's Monadology.

    Historical data isn't evidence in economics. Historical data is a complex set of data that it is impossible to induce from, because we cannot observe any counter-factual world where one variable is held constant and then all other variables are held constant, such that we can compare two histories with slightly different variables. There is only ever the one history.

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  9. "Non-sequitur. Most or a substantial portion of all businesses would have to be controlled or partnered with the state in order for "the US" to be considered fascist. "

    A bizzare definition of fascism.

    Since the defining characteristics of fascism were

    (1) abolition of democracy
    (2) authoritarianism
    (3) one party state
    (4) abolition of the rule of law
    (5) aggressive foreign policy

    Any definition that ignores those traits and focuses on one thing like "businesses controlled or partnered with the state" presents a contemptobly stupid definition of fascism.

    There is no logical reason why a state with a significant amount of "businesses controlled or partnered with the state" must be "fascist": it could just as easily be communist or social democractic.

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  10. "if the entire world were free market, and there were no governments, and thus no government spending and no inflation, then it will be impossible for any Keynesian to make their case, since it cannot be observed anywhere."

    False. If there had never been governments/states throughout all history, there would be no empirical evidence for how Keynesianism would work.

    Just as there is no empirical evidence for the nonsensical claim that a Rothbardian system would have no involuntary unemployment.

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  11. This is priceless:

    'Historical data isn't evidence in economics."

    Really? Then I guess ALL appeals to the recession of 1920-1921 in support of Austrian economics are out the window!

    Good work. Shooting yourself in the foot.

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  12. Tom DiLorenzo has an interesting new article in the Quarterly Journal of Austrian Economics. It goes to the heart of LK’s galaxy-sized blind spot. LK invents non-existent problems in the realm of voluntary relationships while at the same time having the most extremely naïve third-grade understanding of the nature of government. DiLorenzo writes:

    When potential problems do arise, such as superior knowledge on the part of a used car dealer, marketplace competition provides a solution, as described above.

    No such solutions exist in government, however, which is where asymmetric information is a serious problem. In this case we are dealing with the well-established fact that, in their capacity as voters, people tend to be “rationally ignorant” of almost all of what government does. In fact, government is so pervasive that no human mind could possibly comprehend the tiniest fraction of one percent of what government in a country the size of the U.S. does. Consequently, special-interest groups dominate all democratic governments; government spending, taxing, borrowing and regulatory powers are essentially unlimited; and rent seeking runs amok. The result of all of this in recent years has been unprecedented budget deficits and even the impending bankruptcy of entire governments, from California to Greece.

    Foreign policy is a single case in point of the severe asymmetric information problems in government: All of the negotiations, discussions, and strategy sessions that might lead an entire nation into war are always done by a few people in the executive branch of government in complete secrecy from any citizens. The citizens must then rely on whatever they are told by the spokesmen for the government regarding the supposed reasons for the war. The entire world now knows, for example, that the reason given for the U.S. invasion of Iraq in 2003—that Saddam Hussein had “weapons of mass destruction” and intended to use them in the U.S.—was false. Rational ignorance gives politicians infinitely more latitude to lie to the public compared to the most dishonest used car dealer in the world.

    In markets, dishonest business people can be quickly penalized with the loss of business or bankruptcy. (In addition to losing customers, suppliers will also abandon dishonest business asso ciates). It is quite the opposite in government. Unseating a dishonest member of Congress is virtually impossible
    [DiLorenzo forgets to mention that FRAUD is a perfectly good defense in the market if you happen to find a knowledgeable government judge with a sense of integrity - while lying murderous incompetent government actors are usually immune from suit and responsibility - we can‘t sue Dubya for lying about Iraq].

    http://mises.org/journals/qjae/pdf/qjae14_2_6.pdf

    The problems in the voluntary sector are manageable within the voluntary sector. The serious problems facing humans are government actors unconstrained by private property, proper limitations on the scope of their activities and a complete lack of due process, the source of which today is philosophical Keynesianism.

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  13. A bizzare definition of fascism.

    No, it's just the same old, regular, run of the mill definition. Business and government colluding, government controlling but not owning business, whenever there is government using its powers of violence to dictate nominally private business activity, that's fascism. How much fascism there is depends on the scope and extent of this type of government coercion.

    Since the defining characteristics of fascism were

    (1) abolition of democracy
    (2) authoritarianism
    (3) one party state
    (4) abolition of the rule of law
    (5) aggressive foreign policy

    You're confusing politics of fascism with the economics of fascism. Since this is (allegedly) an economics blog (hahaha), when Roddis and I use the word fascism, we refer to the economics of fascism, not the politics of fascism.

    At any rate, those five things you listed are all either fully present or less than fully present in the US. Authoritarianism, check. One party state, check (and no, Democrats and Republicans are not different parties, they're just two factions of the same socialist party, who are only somewhat kept in check by a judiciary that isn't fully socialist). Abolition of the rule of law, check. Aggressive foreign policy, check.

    Any definition that ignores those traits and focuses on one thing like "businesses controlled or partnered with the state" presents a contemptobly stupid definition of fascism.

    It would help if you spelled "contemptibly" correctly, then your idiotic "rebuttal" would have been more convincing.

    The point is that you are ignorantly focusing only on the politics of fascism (since you are a political hack, not an economist), and failing to consider the economics of fascism. Roddis and I are talking about the economics of fascism.

    Go ahead and try to make a list of the economics of fascism. I bet you can't, because you don't understand economics!

    There is no logical reason why a state with a significant amount of "businesses controlled or partnered with the state" must be "fascist": it could just as easily be communist or social democractic.

    False. Communism is a specific type of socialism apart from fascist socialism. Economically, communism is when the government both owns and controls the means of production. Soviet Union, North Korea, etc. Fascism is when the government controls, but does not own, the means of production. Ownership is retained by nominally private business owners, who are enmeshed with the state either through partnership, or coercion, depending on which special interest group has the most influence on the state. Examples of fascism are Italy and Germany WW2, and to a lesser extent, the UK and US today, which is why we say there is corporatism in the UK and US, and not straight up fascism.

    In the US, if you want to get really accurate, there is a mixture of all kinds of economics. There are aspects of markets (the internet, black market, electronics), fascism (banking, military industrial congressional complex, healthcare), and communism (money production, security and protection, education).

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  14. "if the entire world were free market, and there were no governments, and thus no government spending and no inflation, then it will be impossible for any Keynesian to make their case, since it cannot be observed anywhere."

    False. If there had never been governments/states throughout all history, there would be no empirical evidence for how Keynesianism would work.

    Idiot, I didn't claim that there would be empirical evidence for how Keynesianism would (fail) "work." I said that, assuming your stupid claim that we must observe economic theories before we can know whether they will work or not, is true, then it would be impossible for a Keynesian to make their case.

    But you are contradicting yourself when you attack the free market. Your claim is that Keynesian policies are necessary because without them, in a free market, idle resources and unemployment will remain unbearably high. But you also said that a free market has never existed and does not currently exist. So how in the fuck can you claim that a free market contains plenty of idle resources and unemployment, if you yourself claimed that we don't observe a free market, and thus, according to you, we can't make such judgments?

    You idiot! You're contradicting yourself so badly that it hurts.

    You are justifying your own nonsense by using the same premise that you are using to attack the free market!

    We don't observe a free market because a free market has, according to you, never existed, and thus no free market historical data exists. But that doesn't stop you from claiming that a free market would contain too many idle resources and unemployment! Oh, but when Austrians claim that in a free market, idle resources and unemployment would be at minimum, you do a complete 180 and claim "b-b-b-but a free market has never existed, so you have no historical data with which to prove your case!"

    I am posting this to Anderson's blog. This is hilarious. Game over you loser.

    Just as there is no empirical evidence for the nonsensical claim that a Rothbardian system would have no involuntary unemployment.

    There is no empirical evidence for a free market, and yet that doesn't stop you from claiming that in a free market, idle resources and unemployment would be prevalent, you contradictory hypocritical fool.

    You ARE using a priori argumentation to justify your stupid worldview. The only problem is that your a priori theory is full of contradictions and fallacies. Historical data can't save you, because historical data is exactly consistent with Austrian theory. Not a single historical set of data has ever contradicted Austrian theory, nor has it ever confirmed the Keynesian theory. Economics is an a priori science, as you painfully have made clear in your blatant contradictory nonsense here.

    Hilarious.

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  15. This is priceless:

    'Historical data isn't evidence in economics."

    Really? Then I guess ALL appeals to the recession of 1920-1921 in support of Austrian economics are out the window!

    Appeals to 1920 do not CONFIRM Austrian theory. No historical data can ever confirm or refute any economics theory.

    But that doesn't mean that we can't appeal to history and interpret what happened using a theory. Keynesians interpret history by using their a priori theory on government inflation and spending. Austrians interpret the same history using their a priori theory of economic calculation, and catallactics.

    When various Austrians point to 1920, what they are doing is not trying to prove the Austrian theory correct using that data, no, they are taking their already proven economics theory, and interpreting the data. For example, the Austrians have shown that government spending cannot cure the problems inherent in the business cycle. They take that knowledge and then interpret the 1920 depression and conclude something like "the theory that government spending cannot cure depressions is consistent with the events that took place in the 1920 depression."

    They are not attempting to PROVE via induction that 1920 proves their case. Austrian theory is, like Keynesianism, a priori.

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  16. Good work. Shooting yourself in the foot.

    Nope, not even close. Not only is the Austrian theory is not challenged in any way by my statement above, but my statement above is in fact THE Austrian view. Ask any Austrian economist, and every single one of them will tell you that historical data can neither confirm nor refute any economics theory. Historical data is special, never to be repeated, contingent on the knowledge people had at the time, and contingent on the actions they took based on that knowledge. But today is completely different. Today, people know different things. Today, people are acting differently. There is no way that a constantly changing set of historical data can provide us with any regular patterns of economic phenomena, not when that historical data is based on constantly changing knowledge and actions.

    Austrian economics is, in short, the realization that we must look at knowledge and actions as such, rather than specific knowledge and specific actions taking place throughout history.

    Imagine a red dot on the wall constantly moving this way and that, in seemingly random ways. The positivist will try to induce a law from the motions of the dot, whereas the Austrian will realize that we should consider the human who is holding the laser pointer, and self-reflect upon ourselves as thinking and acting subjects, to conclude that the motions of the red dot are the result of purposeful human action. We can logically deduce that the human moving the laser pointer cannot also perform an action that is incompatible with moving a laser pointer. We can then deduce that moving the laser pointer incurs costs, and alternative actions forgone. We can also deduce that the motion of the red dot on the wall is not random, and not capable of being understood using induction of historical data of the previous locations of the red dot. There is no derivable equation that can predict the next location of the dot based on previous locations of the dot. History cannot serve as a foundation for where the dot will be in the next moment. The location of the dot is contingent upon the intentions of the human holding the laser pointer.

    Keynesians are like cats who go crazy trying to figure out the red dot on the wall, who ignore everything else except the red dot.

    Austrians are humanists. We look to individual human action to explain ALL economic phenomena. We don't put aggregate statistics of past locations of red dots over and above the human lives controlling it, such that if we can only make the red dots move in particular ways, then we can improve the lives of the people holding the laser pointers. No, we look to the logical necessities of pointing lasers at walls, and we deduce from there. We don't attempt to predict where the red dot will go, because we can never read other people's minds. You positivist Keynesian morons believe that all theories of economics must be proven by observing the past motions of the red dot. The Austrian will correctly deduce that it is logically necessary that choosing to move the laser pointer will incur costs, of foregone alternative courses of actions. You will idiotically respond with "Oh yeah? Prove it using past locations of the red dot!"

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  17. "Appeals to 1920 do not CONFIRM Austrian theory. No historical data can ever confirm or refute any economics theory."

    Your ramblings show you don't understand Austrian economics.

    In fact, you should have said that it is followers of Mises's pure praxeology that take the view that history cannot confirm theories.

    You also appear to have overlooked some 50 years of Austrian scholarship after Mises.

    Hayek NEVER really accepted Mises’ apriorism at all:

    15 May, 1983, Hayek stated:

    I had never accepted Mises’ a priorism .... Certainly 1936 was the time when I first saw my distinctive approach in full clarity – but at the time I felt it that I was merely at last able to say clearly what I had always believed – and to explain gently to Mises why I could not ACCEPT HIS A PRIORISM” (quoted in Caldwell 2009: 323–324).

    A number of Austrian economists today do NOT even follow Mises’ praxeology in its pure form, and some are quite critical of praxeology and offer different methodologies for Austrian economic analysis: Israel Kirzner appeared to have taken a more pragmatic approach to Austrian methodology; Lavoie criticised rigid Misesian praxeology from the perspective of modern hermeneutics. In particular, Gerald P. O’Driscoll and Mario J. Rizzo offered a reconstructed Austrian methodology in their book The Economics of Time and Ignorance (1985; rev. edn 1996), which allows empirical testing of interpretive theories to see whether they apply to the real world.

    http://socialdemocracy21stcentury.blogspot.com/2011/05/hayek-on-mises-apriorism.html

    http://socialdemocracy21stcentury.blogspot.com/2011/02/limits-of-human-action-axiom.html

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  18. "You're confusing politics of fascism with the economics of fascism. "

    When nothing else works, just resort to the changing the meaning of words, huh! Good work.

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  19. "We don't observe a free market because a free market has, according to you, never existed, and thus no free market historical data exists. ... etc"

    Another shift in the meaning of terms whenever it suits you. The term "free market" is of course used with 2 meanings:

    (1) the real world of capitalism in the 19th and 20th centuries, which affords any amount of empirical evidence that involuntary unemployment exists and idle resources are a significant characteristic of these systems

    (2) the fantasy world of Rothbardian anarcho-capitalism, which has never existed in the real world.

    Bob Roddis was challenged to provide empirical evidence for the view that
    "there is no problem of involuntary unemployment in the [Rothbardian] market", since he advocates THAT kind of free market

    He has not one shred of empirical evidence for his view - a totally valid point.

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  20. "Appeals to 1920 do not CONFIRM Austrian theory. No historical data can ever confirm or refute any economics theory."

    Your ramblings show you don't understand Austrian economics.

    No, YOUR ramblings show you don't understand Austrian economics.

    In fact, you should have said that it is followers of Mises's pure praxeology that take the view that history cannot confirm theories.

    Austrian economics is based on praxeology. Mises showed that Menger's economics is praxeologically founded.

    You also appear to have overlooked some 50 years of Austrian scholarship after Mises.

    Such as?

    Hayek NEVER really accepted Mises’ apriorism at all:

    I am not a Hayekian. Using Hayek as a straw man is intellectually dishonest.

    Nothing of what you said does not in any way refute what I said. You're grasping at straws.

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  21. "You're confusing politics of fascism with the economics of fascism."

    When nothing else works, just resort to the changing the meaning of words, huh! Good work.

    I did not CHANGE the meaning of words. I was utilizing the context of economics the entire time. That you realize that my arguments about fascism were economics based, and not politics based, is not ME changing the definition. It is you realizing you were using a different context.

    This is an economics blog is it not? You're just proving that you're just a political hack, not an economist.

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  22. "We don't observe a free market because a free market has, according to you, never existed, and thus no free market historical data exists. ... etc"

    Another shift in the meaning of terms whenever it suits you. The term "free market" is of course used with 2 meanings:

    False. Your recourse to pretending that my arguments above are just semantics is proof that you can't respond to it using arguments in the context.

    You claimed that the free market has never existed.

    You said:

    "Given that the type of free market system you advocate has never existed in the real world ever, where is the empirical evidence for this?"

    "Oh that's right! Empirical evidence doesn't matter when you have an aprioristic system as false as Leibniz's Monadology."

    http://socialdemocracy21stcentury.blogspot.com/2011/08/keynes-and-pyramid-building-what-he.html?showComment=1314281931126#c3364276866987801455

    You knew what I meant the whole time, and now you're lying and pretending that I just changed the definition in my last post!

    (1) the real world of capitalism in the 19th and 20th centuries, which affords any amount of empirical evidence that involuntary unemployment exists and idle resources are a significant characteristic of these systems

    So now You just changed the definition of free market, and now you're claiming that instead of it never existing, now it has existed, in the 19th and 20th centuries.

    Hahahaha, you hypocrite. You got exposed and now you're redefining your way out of it!

    That's why you accused me of changing definitions. It's to act as a defense against what you know is coming, which is an attack on you for changing definitions.

    OK asshole, if you want to define what we had in the 20th and 19th centuries as a free market, then I will just say that those times were more free than today, but they were not free markets, because the state did interfere in money and banking, and it is precisely because of that interference that there were episodes of idle resources and unemployment, i.e. boom and bust cycle.

    During the 19th century, the government interfered with money and banking. "US Continentals" were an inflation of the money supply brought about by the government, not the free market. Greenbacks were a government created inflation.

    You cannot point to the 19th century as a period of free market, because money production was not free market, and money is crucial in the Austrian theory.

    Now go ahead and redefine words again because you can't make any arguments.

    (2) the fantasy world of Rothbardian anarcho-capitalism, which has never existed in the real world.

    If it's never existed, then according to your position regarding epistemology through observation only, you cannot claim that anarcho-capitalism will experience widespread idle resources and unemployment either!

    Since I am an anarcho-capitalist, you cannot legitimately ask me to point to history to prove my position, because it's never existed!

    You therefore can only refute me through logic.

    So tell me, WHY is it that a free market cannot minimize idle resources and unemployment? What is the theory behind such a claim? What are the principles that underlie that conclusion?

    Bob Roddis was challenged to provide empirical evidence for the view that
    "there is no problem of involuntary unemployment in the [Rothbardian] market", since he advocates THAT kind of free market


    You just said that anarcho-capitalism has never existed, and you ask Roddis to provide you with historical evidence of anarcho-capitalism?

    You're dumber than I thought.

    ReplyDelete
  23. MF – This is brilliant!:

    (2) the fantasy world of Rothbardian anarcho-capitalism, which has never existed in the real world.

    If it's never existed, then according to your position regarding epistemology through observation only, you cannot claim that anarcho-capitalism will experience widespread idle resources and unemployment either!

    Since I am an anarcho-capitalist, you cannot legitimately ask me to point to history to prove my position, because it's never existed!

    You therefore can only refute me through logic.

    So tell me, WHY is it that a free market cannot minimize idle resources and unemployment? What is the theory behind such a claim? What are the principles that underlie that conclusion?


    This so-called Rothbardian fantasy world is generally English common law applied rigorously without exceptions. Any alleged break-down would be at the margins. Average people understand notions of contracts, private property, the right to be safe in one’s person, and due process etc… Also, freedom should be the default position of everyone. The intervener must prove that there is a problem that violates common law notions and demonstrate that the so-called SWAT team solution is indeed a solution.

    Here’s an analogy. Murder is illegal in Detroit but Detroit suffers about 40 murders per 100,000 population per year. The fact that a murder-free year does not occur does not impair our ability to understand what murder is and that murder is a violation of basic common law rights. The fact that there are no murder-free years does not make attempts at eliminating murder a fantasy.

    The fact that there has never been such a rigorous recognition and protection of such basic common law rights in the past as Rothbardians desire (but where there has been a significant but partial recognition in the past) does not make the proposal for a more rigorous enforcement “rubbish” without a specific objection to specific situations that demonstrate where it might break down.

    ReplyDelete
  24. Gah, these exchanges with "Major_Freedom" are not even worth reading. Every one of his comments boils down to, "I know you are, but what am I?"

    ReplyDelete
  25. As always, Major Freedom has virtually unlimited free time to spend showing off how little he knows about the mechanics of our monetary system.

    ReplyDelete
  26. "You're confusing politics of fascism with the economics of fascism. "


    As if they can be separated. And you have the temerity to call anyone else dumb?

    ReplyDelete
  27. "If it's never existed, then according to your position regarding epistemology through observation only, you cannot claim that anarcho-capitalism will experience widespread idle resources and unemployment either!"

    Straw man. I don't hold to an epistemology "through observation only". You've made that up.

    Theoretical arguments can be given to refute the case for Rothbardian anarcho-capitalism.

    ReplyDelete
  28. "You claimed that the free market has never existed.

    You said:

    "Given that the type of free market system you advocate has never existed in the real world ever, where is the empirical evidence for this?"


    And that refers to the Rothbardian systems only. Get your facts straight.

    ReplyDelete
  29. "then I will just say that those times were more free than today, but they were not free markets, because the state did interfere in money and banking, and it is precisely because of that interference that there were episodes of idle resources and unemployment, i.e. boom and bust cycle."

    A statement that illustrates nicely the sheer inconsistency of Austrians: on the one hand, you want to use the 19th century as empirical evidence in support of your Rothbardian system, but when it is pointed out that the 19th century had frequent recessions and depressions (e.g., the depression fo 1890s), very high employment relative to the Keynesian period, inferior GDP growth, suddenly it is no longer a legitimate example from which you can draw empirical evidence, because it wasn't a pure Rothbardian system.

    ReplyDelete
  30. Greg:

    "You're confusing politics of fascism with the economics of fascism."

    As if they can be separated. And you have the temerity to call anyone else dumb?

    They are separate, but connected. Economically speaking, fascism has to do with who controls the means of production. Politically, this can come about through dictatorship, democracy, conquest, and all other sorts of political methods.

    Yes, LK is dumb. Dumber than a bag of hammers.

    ReplyDelete
  31. "If it's never existed, then according to your position regarding epistemology through observation only, you cannot claim that anarcho-capitalism will experience widespread idle resources and unemployment either!"

    Straw man. I don't hold to an epistemology "through observation only". You've made that up.

    You are lying again.

    I said:

    "There is no problem of involuntary unemployment in the market."

    You responded with:

    "Given that the type of free market system you advocate has never existed in the real world ever, where is the empirical evidence for this?"

    "Oh that's right! Empirical evidence doesn't matter when you have an aprioristic system as false as Leibniz's Monadology."

    In other words, you hold that my knowledge of the argument "There is no problem of involuntary unemployment in the market" cannot be a priori, but must arise from observation a posteriori. That is what you consider to be how economic knowledge is acquired!

    Now you're lying again, and denying that your epistemology is empiricist positivism after you just said it is.

    Theoretical arguments can be given to refute the case for Rothbardian anarcho-capitalism.

    OK you shape shifting snake, WHAT ARE THOSE THEORETICAL ARGUMENTS? This ought to be friggin hilarious.

    ReplyDelete
  32. "You claimed that the free market has never existed.

    You said:

    "Given that the type of free market system you advocate has never existed in the real world ever, where is the empirical evidence for this?"

    And that refers to the Rothbardian systems only. Get your facts straight.

    Hahahahahahahahahaha

    You admitted that such a system has never existed, and yet idiotically you asked for empirical evidence showing it works.

    You're changing your claims because your getting your ass handed to you. And everyone can see it.

    ReplyDelete
  33. "then I will just say that those times were more free than today, but they were not free markets, because the state did interfere in money and banking, and it is precisely because of that interference that there were episodes of idle resources and unemployment, i.e. boom and bust cycle."

    A statement that illustrates nicely the sheer inconsistency of Austrians: on the one hand, you want to use the 19th century as empirical evidence in support of your Rothbardian system

    Straw man nonsense. I do not, and have NEVER, "used the 19th century as empirical evidence in support" of the free market. I have told you many times that historical data can neither confirm or falsify any economics theory.

    No Austrian uses the 19th century to prove any economic theory. What Austrians are doing is interpreting the 19th century using an a priori theory, exactly like Keynesians interpret history using their own a priori theory. None of us have a counter-factual world to compare to the only history that exists. There is just the one history. If there is a boom and bust, Austrians will interpret that history using a priori ABCT, and Keynesians will interpret history using a priori animal spirits and AD.

    You don't have a clue what Austrian economics is about. It is not an a posteriori doctrine. Historical data does not prove a single economics theory, let alone an Austrian or Keynesian one. All history can show us is what people knew and what they did at that time. We can only use history to prove events. We cannot use history to prove economic laws like the law of marginal utility, or any other economics law. Economics laws are based on logical categories of action.

    ReplyDelete
  34. but when it is pointed out that the 19th century had frequent recessions and depressions (e.g., the depression fo 1890s), very high employment relative to the Keynesian period, inferior GDP growth, suddenly it is no longer a legitimate example from which you can draw empirical evidence, because it wasn't a pure Rothbardian system.

    The 19th century had frequent recessions because the government and/or the banking system with the government's protection, engaged in credit expansion, which generated investment not backed by prior voluntary savings, which throws off the coordination between investors and consumers. Interest rates are artificially lowered from where they otherwise would have been, and that leads to investors allocating resources as if there is more real capital than actually exists. This is because interest rates naturally lower when real savings increases, that is, when people consume less and save more in the present.

    In a free market, interest rates can only lower if people increase their savings. But because the government, or the banking system with the government's consent, increased the quantity of loans ex nihilo during the 19th century, that lowered interest rates artificially, meaning interest rates decreased without an increase in real voluntary savings.

    When interest rates decline, investors invest as if real savings have increased. But they have not, so the investments they make cannot be sustained in real terms.

    The reason why the housing bubble arose is because during the early 2000s, the Federal Reserve forced interest rates way down after the Nasdaq bubble burst, to less than 2% for a year at one point, and accompanying this, over $2 trillion in new money was created from nothing. Much of that money poured into the housing market, bidding up the prices of houses, at double digit rates per year in many locations. But these investment could not be sustained. Why? Because people didn't actually save more to make that $2 trillion available. The Fed system just printed it. Once consumer prices started to rise by too much, the Fed began to raise interest rates in 2005. To do that, they slowed the creation new bank reserves. After about a year, liquidity of course started to tighten, and investors dipped into their mutual funds accounts for a time. That enabled the housing boom to last for another year. But eventually, because the pouring of new money was not there, the fuel for the housing boom dried up, and all the houses and all the mortgage backed derivatives were exposed as worthless.

    The creation of these houses is what Austrians call malinvestment. They were only expanded because the Fed made trillions of new dollars available, which redirected real resources away from where they would have gone, where they would have been sustainable, to housing instead. All because interest rates and hence mortgage rates were far too low and credit expansion was too high.

    ReplyDelete
  35. "Economically speaking, fascism has to do with who controls the means of production. "

    Not even true. Fascism had diverse economic policies: there was no "universal" fascist economics.

    (1) Mussolini originally pursued standard neoclassical laissez faire policies:

    "From 1922 to 1925, Mussolini's regime pursued a laissez-faire economic policy under the liberal finance minister Alberto De Stefani. De Stefani reduced taxes, regulations, and trade restrictions and allowed businesses to compete with one another. But his opposition to protectionism and business subsidies alienated some industrial leaders, and De Stefani was eventually forced to resign."

    http://www.econlib.org/library/Enc1/Fascism.html

    (2) The Austro-fascism of the Dollfuss and Schuschnigg regime purused classical deflationary neoclassical policies:

    “In tackling the economic crisis the Dollfuss-Schuschnigg dictatorship pursued harsh deflationary policies designed to balance the budget and stabilize the currency. The government’s program featured severe spending cuts, high interest rates, and frozen wages. ... In a sense the Christian Corporative regime demonstrated the viability of the Austrian state, but it did so at the cost of alienating a majority of the Austrian people. On the eve of Anschluss a third of the population was still out of work, while those fortunate enough to have jobs were bringing home paychecks considerably smaller than before the Great War.”

    Evan Burr Bukey, Hitler's Austria: Popular Sentiment in the Nazi Era, 1938-1945 (University of North Carolina Press, 2000), p. 17.

    ReplyDelete
  36. "In other words, you hold that my knowledge of the argument "There is no problem of involuntary unemployment in the market" cannot be a priori, but must arise from observation a posteriori."

    False. The belief there is "no problem of involuntary unemployment in the {Rothbardian free] market" is derived from a FALSE aprioristic praxeological system.

    That does not deny the validity of deductive reasoning in other forms or of theorising using deduction per se.

    ReplyDelete
  37. "Economically speaking, fascism has to do with who controls the means of production."

    Not even true. Fascism had diverse economic policies: there was no "universal" fascist economics.

    False. Fascism has one and only one economics. It is government control, but not ownership, over the means of production.

    (1) Mussolini originally pursued standard neoclassical laissez faire policies:

    "From 1922 to 1925, Mussolini's regime pursued a laissez-faire economic policy under the liberal finance minister Alberto De Stefani. De Stefani reduced taxes, regulations, and trade restrictions and allowed businesses to compete with one another. But his opposition to protectionism and business subsidies alienated some industrial leaders, and De Stefani was eventually forced to resign."

    Mussolini didn't always impose fascism.

    (2) The Austro-fascism of the Dollfuss and Schuschnigg regime purused classical deflationary neoclassical policies:

    Fascists can eat sandwiches too.

    ReplyDelete
  38. "In other words, you hold that my knowledge of the argument "There is no problem of involuntary unemployment in the market" cannot be a priori, but must arise from observation a posteriori."

    The belief there is "no problem of involuntary unemployment in the {Rothbardian free] market" is derived from a FALSE aprioristic praxeological system.

    False. The praxeological system is undeniably true. You cannot deny it without verifying it, because any refutation attempt of any argument whatsoever, including praxeology, is itself a human action.

    It would like saying "There is no such thing as language." The content contradicts the argument.

    Similarly, by attempting to refute praxeology, you'd be verifying it. You'd be committing a performative contradiction.

    You can try to refute praxeology as many times as you want. Every single attempt will be a self-contradiction, because they would all be human actions.

    That does not deny the validity of deductive reasoning in other forms or of theorising using deduction per se.

    Hahahaha, so deduction is valid in other fields except Austrianism. Hahahaha, your dogma is more obvious than herpes on a hooker.

    ReplyDelete
  39. "You cannot deny it without verifying it, because any refutation attempt of any argument whatsoever, including praxeology, is itself a human action.

    The most vulgar and ignorant distortion even of what even Mises thought:

    http://socialdemocracy21stcentury.blogspot.com/2011/02/limits-of-human-action-axiom.html

    You are perfecet exmaple of a “pop” Austrian making truly absurd claims on the basis of the human action axiom, such as that all inferences of Austrian economics must be true because they follow from the human action axiom. Not even Mises believed such rubbish:

    “Every theorem of praxeology is deduced by logical reasoning from the category of action. It partakes of the apodictic certainty provided by logical reasoning that starts from an a priori category. Into the chain of praxeological reasoning the praxeologist introduces certain assumptions concerning the conditions of the environment in which an action takes place. Then he tries to find out how these special conditions affect the result to which his reasoning must lead. The question whether or not the real conditions of the external world correspond to these assumptions is to be answered by experience. But if the answer is in the affirmative, all the conclusions drawn by logically correct praxeological reasoning strictly describe what is going on in reality” (Mises 1978: 44).

    In other words, praxeology relies on deduction and requires premises that are sometimes synthetic propositions, not ones true a priori.

    Once you get into praxeological arguments they quickly come to use synthetic propositions – either present or hidden – that can only be verified empirically. Thus empirical evidence becomes very relevant indeed.

    The “apodictic certainty” claimed for praxeology actually vanishes like a puff of smoke, if there is doubt about the truth of its synthetic stated and hidden assumptions or premises. And there certainly is. One example I have dealt with before is the argument for free trade by comparative advantage:

    http://socialdemocracy21stcentury.blogspot.com/2011/01/mises-on-ricardian-law-of-association.html

    ReplyDelete
  40. "so deduction is valid in other fields except Austrianism. "

    Deduction is valid. The actual arguments offered by Misesians through praexology are flawed through flase hidden assumptions and false empirical assumptions.

    ReplyDelete
  41. Fascism has one and only one economics. It is government control, but not ownership, over the means of production.
    ....
    Mussolini didn't always impose fascism.
    ....
    Fascists can eat sandwiches too.


    Priceless. Reduced to blathering idiocy, huh?

    ReplyDelete
  42. "You cannot deny it without verifying it, because any refutation attempt of any argument whatsoever, including praxeology, is itself a human action.

    The most vulgar and ignorant distortion even of what even Mises thought

    Red herring. I was not even attempting to summarize what Mises thought you idiot. I could not have "distorted" what he said.

    You are perfecet exmaple of a “pop” Austrian making truly absurd claims on the basis of the human action axiom, such as that all inferences of Austrian economics must be true because they follow from the human action axiom. Not even Mises believed such rubbish

    Fallacy of authority. It doesn't matter what Mises thinks or didn't think. The argument stands on its own.

    In other words, praxeology relies on deduction and requires premises that are sometimes synthetic propositions, not ones true a priori.

    You idiot, the whole basis of Mises' neoKantian framework is that there exists true synthetic a priori propositions.

    Once you get into praxeological arguments they quickly come to use synthetic propositions – either present or hidden – that can only be verified empirically. Thus empirical evidence becomes very relevant indeed.

    Wrong. While there can be no doubt that all knowledge begins with experience, it by no means follows that all knowledge arises out of experience. Experience can "awaken" certain knowledge that is not itself apprehended by experience, but by a priori logic.

    The “apodictic certainty” claimed for praxeology actually vanishes like a puff of smoke, if there is doubt about the truth of its synthetic stated and hidden assumptions or premises.

    There is no doubt of the human action axiom. Any attempt to refute it, verifies it.

    And there certainly is.

    There certainly is not. Claiming "there certainly is" is itself a human action you dolt.

    One example I have dealt with before is the argument for free trade by comparative advantage:

    You've already been refuted there too.

    "so deduction is valid in other fields except Austrianism. "

    Deduction is valid. The actual arguments offered by Misesians through praexology are flawed through flase hidden assumptions and false empirical assumptions.

    Your attempt to refute praxeology, right there, just verified it, because it was an action on your part.

    The arguments are not flawed, they are not hidden, and they are not false empirically.

    ReplyDelete
  43. Fascism has one and only one economics. It is government control, but not ownership, over the means of production.

    Mussolini didn't always impose fascism.

    Fascists can eat sandwiches too.

    Priceless. Reduced to blathering idiocy, huh?

    No you idiot. That Mussolini at some points in time enacted liberal market reforms does not mean he did not enact fascist reforms.

    The sandwich quip was to mock your irrelevant claim that "The Austro-fascism of the Dollfuss and Schuschnigg regime purused classical deflationary neoclassical policies."

    But I'm not surprised it went over your head.

    ReplyDelete
  44. "That Mussolini at some points in time enacted liberal market reforms does not mean he did not enact fascist reforms."

    LOL... Correct, though a straw man, since I no where denied that after the mid-1920s he adopted state interventionism.

    The point was that fascism had diverse economic policies: there was no "universal" fascist economics.

    You have not refuted that.

    ReplyDelete
  45. Your attempt to refute praxeology, right there, just verified it, because it was an action on your part.

    Now you are make the laughable error of conflating

    (1) a inference arrived at by a long chain of deductive reasoning in praxeology with

    (2) the mere truth of the human action axiom.

    Two different things.

    ReplyDelete
  46. > In other words, praxeology relies on
    > deduction and requires premises that are
    > sometimes synthetic propositions, not ones
    > true a priori.

    ... the whole basis of Mises' neoKantian framework is that there exists true synthetic a priori propositions.


    Red herring. The existence or non-existence of synthetic a priori propositions is irrelveant to the question wether Mises's praxeology uses hidden and present synthetic propositions as premises in its chains of deductive arguments.

    Mises is quite clear that praxeology uses synthetic propositions as premises:

    “Man … can never be absolutely certain that his inquiries were not misled and that what he considers as certain truth is not error. All that man can do is to submit all his theories again and again to the most critical reexamination. This means for the economist to trace back all theorems to their unquestionable and certain ultimate basis, the category of human action, and to test by the most careful scrutiny all assumptions and inferences leading from this basis to the theorem under examination. It cannot be contended that this procedure is a guarantee against error. But it is undoubtedly the most effective method of avoiding error” (Mises 1949: 68).

    “Every theorem of praxeology is deduced by logical reasoning from the category of action. It partakes of the apodictic certainty provided by logical reasoning that starts from an a priori category. Into the chain of praxeological reasoning the praxeologist introduces certain assumptions concerning the conditions of the environment in which an action takes place. Then he tries to find out how these special conditions affect the result to which his reasoning must lead. The question whether or not the real conditions of the external world correspond to these assumptions is to be answered by experience. But if the answer is in the affirmative, all the conclusions drawn by logically correct praxeological reasoning strictly describe what is going on in reality” (Mises 1978: 44)

    If you have "assumptions concerning the conditions of the environment in which an action takes place" that are false, your deductive inferences are also false.

    ReplyDelete
  47. "That Mussolini at some points in time enacted liberal market reforms does not mean he did not enact fascist reforms."

    LOL... Correct, though a straw man, since I no where denied that after the mid-1920s he adopted state interventionism.

    After repeated claims that I am straw manning you, it is now crystal clear that you actually have no clue what it means.

    A straw man is attributing a position to someone that they do not in fact hold, with the intention of refuting the person's actual position by refuting the false position.

    I did not attribute to you the position that you believed that Mussolini did not enact fascist policies after the mid-1920s. I made the argument that Mussolini did enact fascist policies not because I claim you held the opposite, but because you said that Mussolini enacted liberal economic reforms.

    His liberal market reforms were not fascist reforms (no, I am not attributing to you the opposite position, so for the love of christ, realize this is not a straw man. It's my argument. In fact, all my statements are my own positions and my own arguments unless I explicitly say otherwise, ok?). A policy doesn't become fascist or free market based on the label you assign to the policy maker. A policy is fascist if it is an exercise of government control over the disposition and/or use of a means of production.

    The point was that fascism had diverse economic policies: there was no "universal" fascist economics.

    False. The liberal market reforms pre-mid-1920s were not fascist reforms, even though Mussolini was the one who enacted them, even though he is considered a fascist.

    Fascism has one and only one economics. Government control, but not ownership, over means of production. If a policy is directly against this, then it's not fascism. If it is consistent with this, then it is fascism.

    You have not refuted that.

    Oh yes I have. I just did so again. Hopefully it will click in this time.

    ReplyDelete
  48. Your attempt to refute praxeology, right there, just verified it, because it was an action on your part.

    Now you are make the laughable error of conflating

    (1) a inference arrived at by a long chain of deductive reasoning in praxeology with

    (2) the mere truth of the human action axiom.

    False. All I am doing is proving to you that the human action axiom itself cannot be refuted. If it cannot be refuted, then everything that follows from it deductively, provided the logic is sound, also cannot be refuted.

    I was not conflating the axiom with what can be deduced from it. I was just showing you that human action is an a priori true axiom. The knowledge of this axiom has its origins in observation, but the truth of the axiom arises from a priori self-reflection. It cannot arise from observation alone. You cannot gain knowledge that someone is making an observation solely by observing them. Observation itself must be understood a priori, and then one can understand that one is observing someone making an observation.

    ReplyDelete
  49. "All I am doing is proving to you that the human action axiom itself cannot be refuted.

    The human action axiom is a trivial observation that can also be held by Marxists, communists, Keynesians, neoclassicals, monetarists, or any other economist you care to name. And there is nothing significant you can deduce from it without other premises, since the most simple, useful deductive argument like the syllogism requires 2 premises to infer anything.

    If it cannot be refuted, then everything that follows from it deductively, provided the logic is sound, also cannot be refuted."

    That is laughable nonsense. Again: the simplest deduction requires 2 premises: a major and minor premise. Even with the human action axiom true, even in your FIRST deduction using it, you must also prove the truth of your other premise. When one gets into long chains of arguments, the number of premises becomes large. Hidden and stated synthetic propositions quickly enter the arguments, as even Mises admitted.

    ReplyDelete
  50. Since you keep throwing around the terms: red herring, straw man, and non sequitur, even though you clearly have no clue what any of them actually mean, starting now I am going to preface every single one of my posts with

    "Straw man. Red herring. Non sequitur."

    Straw man. Red herring. Non sequitur.
    the whole basis of Mises' neoKantian framework is that there exists true synthetic a priori propositions.

    Yes.

    Red herring. The existence or non-existence of synthetic a priori propositions is irrelveant to the question wether Mises's praxeology uses hidden and present synthetic propositions as premises in its chains of deductive arguments.

    Straw man. Red herring. Non sequitur.

    False. The existence of true synthetic a priori propositions is entirely relevant to Mises' framework, because "humans act" is itself a synthetic proposition that Mises argued is true a priori.

    Mises is quite clear that praxeology uses synthetic propositions as premises:

    There is nothing at all compromised in the Austrian framework by utilizing such propositions.

    If you have "assumptions concerning the conditions of the environment in which an action takes place" that are false, your deductive inferences are also false.

    The human action axiom is not false, so your worry is unfounded.

    ReplyDelete
  51. Mises is also a third rate logician:

    Acceptance of Mises’ stated axioms does not necessarily imply acceptance of the “principles” or “applications to reality” which he has drawn from them, even though his logic may be impeccable. When a logical chain grows beyond the limits set by stated assumptions, it uses unstated assumptions. The number of unstated assumptions (axioms, postulates, or other) in Human Action is enormous. If Mises denies this, let him try to rewrite his book as a set of numbered axioms, postulates, and syllogistic inferences using, say, Russell’s Principia or, closer home, Von Neumann’s Theory of Games as a model”
    Schuller, G. J. 1951. “Mises’ ‘Human Action’: Rejoinder,” American Economic Review 41.1: p. 188.

    ReplyDelete
  52. Lord Keynes,

    FFS, please ban this troll. There have been plenty of great ideas and arguments on this blog in the past involving multiple schools of thought, including various forms of Austrianism, which I've found illuminating. The recent spate of solipsism about Free Markets would make Rothbard and Engels throw their hands up in disgust. Scholarship about even fantasy ideas can be fascinating and worthwhile, if everyone has a genuine interest in discovering truth and maintaining standards of decorum and rigor.

    Major_Freedom, I don't give you permission to respond to me, and I have no interest in engaging with violently aggressive individuals like you. I guess we'll see if you can respect that, or if you're the kind of person who thinks no means yes.

    ReplyDelete
  53. "Mises is quite clear that praxeology uses synthetic propositions as premises:

    There is nothing at all compromised in the Austrian framework by utilizing such propositions."


    LOL... So after loads of rubbish, all you can now do is just concede that "Mises is quite clear that praxeology uses synthetic propositions as premises".

    This after wasting more space in this red herring:
    "False. The existence of true synthetic a priori propositions is entirely relevant to Mises' framework, because "humans act" is itself a synthetic proposition that Mises argued is true a priori."

    We are not engaged in a debate about Mises' general "framework": the issue was whether his praxeology does use "synthetic propositions as premises". Now you concede that.

    Anonymous said...
    FFS, please ban this troll etc


    Yes, I am sorely tempted to. But MF does a service in exposing the intellectual vacuity, nonsense, or just outright invention of much of popular/vulgar Austrians.

    ReplyDelete
  54. Mises is quite clear that praxeology uses synthetic propositions as premises:

    There is nothing at all compromised in the Austrian framework by utilizing such propositions."

    LOL... So after loads of rubbish, all you can now do is just concede that "Mises is quite clear that praxeology uses synthetic propositions as premises".

    Straw man. Red Herring. Non Sequitur.

    That is not a "concession". The existence of true synthetic a priori propositions is the very foundation of Misesian epistemology. To "concede" this is to just elucidate an obvious fact to anyone who understands Austrian epistemology.

    This after wasting more space in this red herring:

    "False. The existence of true synthetic a priori propositions is entirely relevant to Mises' framework, because "humans act" is itself a synthetic proposition that Mises argued is true a priori."

    Straw man. Red Herring. Non Sequitur.

    That is not a red herring. That is a direct RESPONSE to your claim that the existence of true synthetic a priori propositions is irrelevant to the Mises' framework. If you understood Mises' framework, you would have known that true synthetic a priori propositions UNDERLIE the entire Misesian epistemology!

    We are not engaged in a debate about Mises' general "framework": the issue was whether his praxeology does use "synthetic propositions as premises". Now you concede that.

    Straw man. Red Herring. Non Sequitur.

    It is nothing to "concede" as if it is an embarrassment or compromise to praxeology.

    Human action IS a true synthetic a priori proposition, and it underlies the entire Austrian epistemology.

    Anonymous said...

    FFS, please ban this troll etc

    Yes, I am sorely tempted to. But MF does a service in exposing the intellectual vacuity, nonsense, or just outright invention of much of popular/vulgar Austrians.

    You have not once shown how Austrian economics is "vacuous", or "nonsense."

    ReplyDelete
  55. "That is a direct RESPONSE to your claim that the existence of true synthetic a priori propositions is irrelevant to the Mises' framework."

    I claimed no such thing.

    My statement:

    "The existence or non-existence of synthetic a priori propositions is irrelveant to the question wether Mises's praxeology uses hidden and present synthetic propositions as premises in its chains of deductive arguments."

    Learn actually address arguments.

    "If you understood Mises' framework, you would have known that true synthetic a priori propositions UNDERLIE the entire Misesian epistemology!"

    LOL.. I am aware of Mises's views on epistemology:

    http://socialdemocracy21stcentury.blogspot.com/2010/10/mises-praxeology-critique.html

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  56. So we have astablished that

    (1) you also accept that Mises' praxeology uses synthetic propositions as premises in its chains of deductive arguments.

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  57. "That is a direct RESPONSE to your claim that the existence of true synthetic a priori propositions is irrelevant to the Mises' framework."

    I claimed no such thing.

    Yes, you did. You said:

    "The existence or non-existence of synthetic a priori propositions is irrelveant to the question wether Mises's praxeology uses hidden and present synthetic propositions as premises in its chains of deductive arguments."

    "If you understood Mises' framework, you would have known that true synthetic a priori propositions UNDERLIE the entire Misesian epistemology!"

    LOL.. I am aware of Mises's views on epistemology:

    Apparently not.

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  58. The sheer dishonesty and idiocy of this last comment is astonishing:

    "Yes, you did. You said:

    "The existence or non-existence of synthetic a priori propositions is irrelevant to the question whether Mises's praxeology uses hidden and present synthetic propositions as premises in its chains of deductive arguments."


    LOL... Right before your eyes I directly said "irrelevant to the question whether Mises's praxeology uses hidden and present synthetic propositions as premises in its chains of deductive arguments."

    I didn't say "irrelevant to Mises's framework".

    Game over.

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  59. The sheer dishonesty and idiocy of this last comment is astonishing:

    "Yes, you did. You said:

    "The existence or non-existence of synthetic a priori propositions is irrelevant to the question whether Mises's praxeology uses hidden and present synthetic propositions as premises in its chains of deductive arguments."

    LOL... Right before your eyes I directly said "irrelevant to the question whether Mises's praxeology uses hidden and present synthetic propositions as premises in its chains of deductive arguments."

    That's what I was referring to! You fallaciously claimed it is irrelevant to Mises' praxeology, when it is what actually UNDERLIES his epistemology!

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  60. In other words, "the question whether Mises's praxeology uses hidden and present synthetic propositions as premises in its chains of deductive arguments" is a part of Mises' framework!

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  61. "That's what I was referring to! You fallaciously claimed it is irrelevant to Mises' praxeology, when it is what actually UNDERLIES his epistemology!"

    Read carefully:

    "The existence or non-existence of synthetic a priori propositions is irrelevant to the question whether Mises's praxeology uses hidden and present synthetic propositions as premises in its chains of deductive arguments."

    I did not say:
    "The existence or non-existence of synthetic a priori propositions is irrelevant to the question of the framework of Mises's praxeology"

    ReplyDelete