(1) “Is There Macroeconomics?,” 3 March, 2012.I have always said that it is utterly absurd to watch Austrians deny the existence of aggregates. Often it is the sign of a truly infantile mind that thinks that, just because something has no concrete existence, then it must not exist.
(2) “Crude Austrians, Macroeconomics, and Complexity,” Facts & Other Stubborn Things, 25 March, 2012.
(3) Jonathan Finegold Catalán, “AAA = Aggregates Annoy (Crude) Austrians,” Economic Thought, 26 March, 2012.
(4) “‘Free Market’ Double Standards 4.0,” Unlearning Economics, March 23, 2012.
(see point 6).
(5) Gene Callahan, “Vulgar Austrians and Aggregates,” September 25, 2011.
(this post by Gene Callahan is somewhat older than the ones above, but I will post a link to it anyway).
But our universe contains a vast number of abstract things that have no concrete existence, say, like universals or numbers. For example, the number 5 has no concrete existence, but does anyone doubt that the number 5, and indeed numbers in general, are real, meaningful concepts? (of course, the advocates of the philosophical position called nominalism would dispute the idea that numbers are real, but the crude Austrians never seem even to have the wit or intelligence to frame the debate on aggregates in terms of nominalism versus realism. I take a “moderate realist” position, for the record). Do people doubt that the sum of 5, 6, 3, 4, 8, and 1 (itself a number) is not a real, meaningful concept?
Aggregates just have no concrete existence like a concrete particular, as, for example, the particular chair you are sitting on, as you read this post.
When we move to economics or finance, it is obvious how aggregates permeate everything.
A business can sell units of a good or even units of heterogeneous goods. But it can calculate value of the volume of its sales of goods as a monetary aggregate in any given period (say, the financial year or even a month or day). It is the same with the aggregated money value of purchased final goods and services throughout an economy in a given year, the aggregate that is used to express or calculate the value of aggregate demand.
Aggregate concepts are required by Say’s law: (1) the value of total factor payments considered as aggregate supply, and (2) aggregate demand as the aggregate of spending on output that has been earned from total factor payments. If aggregate concepts are invalid, then Say’s law is also invalid.
While I am pleased to see Jonathan Finegold Catalán proclaim that only crude Austrians deny the existence of aggregates, a more interesting question is whether he is willing to repudiate statements like this from the Austrian William L. Anderson:
“When Krugman uses ‘demand,’ he means ‘aggregate demand,’ which economically speaking is a nonsensical term. There is no such thing as “aggregate demand.’”Anderson sets himself up as a serious Austrian critic of Paul Krugman, yet here he is caught making the most risible, stupid statements.
William L. Anderson, “Krugman: In the Long Run, We Screw Future Generations,” Krugman-in-Wonderland, June 25, 2010.
“The problem is that Krugman, as a Keynesian macro guy, cannot see anything but aggregates, which is not economics at all. There is no such thing as ‘aggregate demand’ and ‘aggregate supply,’ or at least something with such terms that can be represented in the crude ‘Keynesian Cross’ or an AD-AS graph.”
William L. Anderson, “The ‘Stimulus’ that Failed to ‘Fix’ the Economy ,” Krugman-in-Wonderland, December 21, 2011.
“For all of his ‘credentials,’ let us not forget that Krugman is a Keynesian who has no clue whatsoever what happens in a real economy. His world is the imaginary world of aggregates, GDP numbers, crude graphs, and no real people and certainly no real production.”
William L. Anderson, “Jeremy Warner Gets It Right on Krugman,” Krugman-in-Wonderland, March 21, 2010.
And this sort of stupidity is far more common amongst Austrians, especially internet Austrians, than the more “astute” Austrians think.