tag:blogger.com,1999:blog-6245381193993153721.post8991710695647379336..comments2024-03-17T00:23:24.896-07:00Comments on Social Democracy for the 21st Century: A Realist Alternative to the Modern Left: Murphy on Keynesianism and Great RecessionLord Keyneshttp://www.blogger.com/profile/06556863604205200159noreply@blogger.comBlogger25125tag:blogger.com,1999:blog-6245381193993153721.post-29106159487701432352013-03-22T07:34:27.682-07:002013-03-22T07:34:27.682-07:00You can have have an increased deficit with a unch...You can have have an increased deficit with a unchanged money supply or a increased money supply with an unchanged deficit so these are clearly different terms - and you have clearly muddled them up.<br /><br />It would be nice if you would acknowledge that you just made a simple error in terminology (its really not that big a deal) - but that's clearly not your style.<br /><br /><br /><br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-58896939096495407232013-03-21T21:02:56.255-07:002013-03-21T21:02:56.255-07:00This guy is incompetent. That's that. Good nig...This guy is incompetent. That's that. Good night. More Austrian embarrassment.Philip Pilkingtonhttp://www.nakedcapitalism.comnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-81908189883270031662013-03-21T11:18:16.159-07:002013-03-21T11:18:16.159-07:00And what does that have to do with deficits ?
Y...And what does that have to do with deficits ? <br /><br />You are describing the typical Austrian view on CB/government money creation. Deficits (as generally defined) occur when the government borrows money to fund spending - this does not change the money supply.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-72813297712729347212013-03-21T09:03:42.456-07:002013-03-21T09:03:42.456-07:00I frequently suspect many of the Austrian blog com...I frequently suspect many of the Austrian blog commentators around are not adults but angry teenagers.<br /><br />The cult of Ayn Rand too probably has a great deal of attraction for this sort of "everyone-in the-world-is-wrong-but-me!" phase of immature stupidity.<br />Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-23113028689713511942013-03-21T08:48:25.794-07:002013-03-21T08:48:25.794-07:00I hope that other readers will note the "infi...I hope that other readers will note the "infinite regress" style of the Anonymous commenter's argument. First he asks me for a quote proving that Austrians don't adhere to RARE. I give him this. But he keeps asking more and more questions. He keeps asking for more and more substantiation. This is not the argumentative style of a serious person. It is the posture of a child who continuously asks "why?" thinking that they're being clever but they just come across as juvenile and vulgar.<br /><br />It is "representatives" like this that make non-Austrian hate Austrians and treat them like the children of the economic world.Philip Pilkingtonhttp://www.nakedcapitalism.comnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-86109456922456459862013-03-21T08:43:28.848-07:002013-03-21T08:43:28.848-07:00I think you have some reading up to do my Anonymou...I think you have some reading up to do my Anonymous friend. Well that or its time to sign up to Wikipedia in order to clear up all the misunderstandings of Austrian theory over there. Careful though, I think you have to make clear non-contradictory statements to be taken seriously over there...<br /><br />http://en.wikipedia.org/wiki/Austrian_School#Inflation<br /><br />"In Mises' view, inflation is the result of policies of the government or central bank which result in an increase in the circulating money supply.Following Mises, the modern-day Austrian School argues that this semantic distinction is critical to public discussion of price inflation, and that price inflation can only be prevented by strict control of the money supply."<br /><br />** Side note: isn't it amusing how vulgar internet Austrians will ALWAYS without fail tell you that you "don't understand anything about Austrian economics" when you call them on their BS? I think its because they're a bunch of 15 years olds myself and this is equivalent to "you don't understand meeee!".Philip Pilkingtonhttp://www.nakedcapitalism.comnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-47315947002615675782013-03-20T12:38:50.322-07:002013-03-20T12:38:50.322-07:00"The Austrians are generally concerned that d..."The Austrians are generally concerned that deficits will result in inflation/malinvestment. "<br /><br />I think this sentence captures how little you know about Austrian economics. Austrians think neither of those things. The general unpleasant tone of your comments combined with your ignorance identifies you as someone not worth debating.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-86959452635855716752013-03-20T12:10:08.070-07:002013-03-20T12:10:08.070-07:00Ricardian Equivalence requires Rational Agents. Th...Ricardian Equivalence requires Rational Agents. That's why Ricardo rejected it.<br /><br />The Austrians are generally concerned that deficits will result in inflation/malinvestment. That's how they argue. They do not pick up the Ricardian Equivalence argument because they realise that it requires Rational Agents and that this conflicts with their theories in innumerable different ways.<br /><br />I doubt I'll convince you on this though. You don't seem like the sharpest knife in the drawer. Like Murphy, you don't seem to understand what being internally consistent actually means. <br /><br />Maybe you should stop doing economics and try at something simpler where you can be ambiguous in your theories and speak out of both sides of your mouth and people won't call you out on it? Maybe politics? Or spiritualism? Or something like that. Because if you try that crap in economics you'll just be a laughing stock.Philip Pilkingtonhttp://www.nakedcapitalism.comnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-11133712933570658382013-03-20T09:58:21.684-07:002013-03-20T09:58:21.684-07:00See comment below.
And you never explained your c...See comment below.<br /><br />And you never explained your comment on Austrians and RARE "The Austrian theory, when it says anything about these policies , makes the claim that they will lead to hyperinflation and bank-runs"Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-64390559815895915262013-03-20T07:04:51.673-07:002013-03-20T07:04:51.673-07:00The quote is irrelevant to the discussion in hand....The quote is irrelevant to the discussion in hand. The fact that Austrians (as subjectivists) tend to view uncertainty as subjective scarcely debars them from thinking that people may include expected future tax increases into their plans.<br /><br />Essentially you are saying that for Murphy to even suggest that a huge stimulus package may cause people to fear future tax increases and cut back present spending is somehow in violation of the Austrian code of conduct - and for you this is a bigger issue than whether this suggestion is true or not.<br /><br />Perhaps you should take off your sectarian goggles and actually try and learn something.<br /><br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-84058896518693111052013-03-20T05:14:05.053-07:002013-03-20T05:14:05.053-07:00Wooo! Look like I'm going to have to go slow w...Wooo! Look like I'm going to have to go slow with our Anonymous commenter here. Kid gloves, I suppose.<br /><br />(1) Okay, that quote shows that in Austrian theory you cannot have agents with rational expectations because this is not in keeping with the Austrian theory of Knightian uncertainty and subjectivism.<br /><br />(2) Bob Murphy in his little presentation uses a Ricardian Equivalence argument that states that if consumers see government deficits now they will save to pay for future taxes.<br /><br />(3) This is key: we can only assume (2) if consumers are said to have Rational Expectations. If they do not we have no basis to make the Ricardian Equivalence argument.<br /><br />(4) Thus is Bob Murphy claims to be an Austrian and at the same time makes Ricardian Equivalence arguments then he does not understand Austrian theory.<br /><br />Clear enough or should I draw you a picture?Philip Pilkingtonhttp://www.nakedcapitalism.comnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-24715125622219506052013-03-19T13:04:11.127-07:002013-03-19T13:04:11.127-07:00While it does have the words "rational expec...While it does have the words "rational expectations" in the text that article seems totally irrelevant to the topic being discussed here.<br /><br />How does it demonstrate in any way that "Murphy doesn't understand his own theories" ? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-60425361970457781172013-03-18T07:22:43.089-07:002013-03-18T07:22:43.089-07:00Curiously, I would give him a lot more credit, Nei...Curiously, I would give him a lot more credit, Neil.<br /><br />For example, he thinks that the interest rate is a monetary phenomenon (in contrast to other Austrians who adopt the pure time preference theory) and that all versions of the ABCT that use the unique natural rate of interest are flawed. Quite important admissions for an Austrian.<br />Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-1874653391313985582013-03-18T07:12:48.600-07:002013-03-18T07:12:48.600-07:00@Anonymous
Austrian theory has Knightian uncertai...@Anonymous<br /><br />Austrian theory has Knightian uncertainty at the core of its subjectivist approach. This means that it cannot have RARE.<br /><br />http://mises.org/journals/qjae/pdf/qjae2_4_5.pdf<br /><br />"In essence, mainstream economics has followed the lead of neoclassical<br />theorists John von Neumann, Oskar Morgenstern, Leonard Savage, and others<br />(including, arguably, Robert Lucas, Jr.) in classifying uncertainty as merely unidentified risk (pp. 11, 14–15). Non-mainstream schools such as the Austrians<br />and Post Keynesians, on the other hand, have insisted on the theoretical distinction<br />between the two. An important result of these different approaches is that the<br />mainstream position has proven especially conducive to the “strong” form of<br />rational expectations, whereby the subjective and objective probability distributions<br />of all economic outcomes are identical, while the non-mainstream positions<br />have allowed significant scope for the “non-convergence” of subjectively formed<br />expectations and objectively determined outcomes."<br /><br />Murphy doesn't understand his own theories. But we've known that for a long time.Philip Pilkingtonhttp://www.nakedcapitalism.comnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-37904333271591282442013-03-18T02:34:47.688-07:002013-03-18T02:34:47.688-07:00Bob Murphy is the David Icke of the Austrian world...Bob Murphy is the David Icke of the Austrian world.<br /><br />NeilWhttps://www.blogger.com/profile/11565959939525324309noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-33943147557730666892013-03-17T19:17:13.500-07:002013-03-17T19:17:13.500-07:00It´s hypocricy since Austrian schoolar´s like Bob ...It´s hypocricy since Austrian schoolar´s like Bob Murphy claim they are the ONLY one that get all things right at all time and they are the ONLY ones that has the answers to economic issues what ever it would be, and constantly,often vicouisly attack ALL other schools for be charlatans ,misguided and misleading.Murphy has for years insulted for exampel Paul Krugman,called him all sort of names from fraud,fool a crook etc.Murphy claim the Austrian school is the only true voice of sanity and proclaim he himself is pure Austrian.If you act in that way,and it shows up you made up facts and even use Ad-hoc explanations that is taken from other schools,to support your thesis,that says that the "Austrians was right all the time"!In that case, of course you have to tolerate to be examined and critisized,when someone catch you when it shows you make up things.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-18610106483852162342013-03-17T14:37:36.227-07:002013-03-17T14:37:36.227-07:00"RE requires Rational Agents with Rational Ex..."RE requires Rational Agents with Rational Expectations (RARE) which are completely counter to Austrian theory. The Austrian theory, when it says anything about these policies, makes the claim that they will lead to hyperinflation and bank-runs."<br /><br />Can you provide a single Austrian source to back up this statement ?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-55747507107728868282013-03-17T11:23:11.538-07:002013-03-17T11:23:11.538-07:00"But Ricardian equivalence and rational expec..."But Ricardian equivalence and rational expectations are not even supported by Austrian economics, and one can only marvel at the breath-taking hypocrisy here."<br /><br />Why is incorporating ideas from other schools of thought "hypocricy" , LK ? <br />robhttps://www.blogger.com/profile/04682517711551179057noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-68703656840524476112013-03-17T06:55:45.925-07:002013-03-17T06:55:45.925-07:00Martin,
Obviously, the Austrians assume wage rig...Martin, <br /><br />Obviously, the Austrians assume wage rigidities exacerbate recessions, though not necessarily being the cause of those recessions.<br /><br />Yet their proposed solution - wage flexibility - is no remedy, since a capitalist economy can suffer involuntary unemployment even with perfect wage and price flexibility. That was Keynes's fundamental insight in the General Theory.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-6728434966383057122013-03-17T06:30:34.824-07:002013-03-17T06:30:34.824-07:00@Ralph Musgrave:
"That assumes that recessio...@Ralph Musgrave:<br /><br />"<i>That assumes that recessions are caused by a sudden decline in labour market flexibility or increase in protectionism.</i>"<br /><br />No it doesn't. It assumes that lack of labour market flexibility and protectionism are obstacles to recovery. <br /><br />Suppose your house is on fire and you've called the fire brigade. Along comes de Soto and points out that a big truck is blocking the way and it will have to be moved in order for the fire engine to be able to reach your house. Would you say de Soto assumes the fire is caused by the truck?<br />martinnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-89111245546888488262013-03-17T01:10:44.452-07:002013-03-17T01:10:44.452-07:00Even Huerta do Soto is talking thru his rear end. ...Even Huerta do Soto is talking thru his rear end. In the first paragraph of his quoted above he claims that the best remedy for a recession is to make “labor markets flexible, abandon protectionism and promote the readjustment…”. <br /><br />That assumes that recessions are caused by a sudden decline in labour market flexibility or increase in protectionism. Of course there isn’t a scrap of evidence to support that.<br /><br />And just in case some dummy Austrian jumps to the conclusion that I’m saying flexible labour markets, and “adjustments” are undesirable, I’m not. My point is simply that recessions are not caused by sudden increases in labour market inflexibility, protectionism, etc.<br />Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-81451284995004659042013-03-16T12:40:32.091-07:002013-03-16T12:40:32.091-07:00On Romer's prediction, I'd highly recommen...On Romer's prediction, I'd highly recommend you check out 'The Escape Artists: How Obama's Team Fumbled the Recovery' by Noam Scheiber (http://www.amazon.co.uk/Escape-Artists-Obamas-Fumbled-Recovery/dp/1439172412)<br /><br />He has discovered that Romer argued for a dramatically higher stimulus, but this was shut down and prevented from being put to the president by Larry Summers for *political* reasons. Romer comes out very well from it.reasoninrevoltnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-73785971486532498462013-03-16T12:29:51.322-07:002013-03-16T12:29:51.322-07:00A friend of mine studied at University of Chicago ...A friend of mine studied at University of Chicago under Eugene Fama and Robert Lucas,among others,and certainly the most fanatic freemarket advocate i know.I once asked him what guys like Fama and Lucas thought about the Austrian school ,since to me they pretty much same.He answered:" Fama and Lucas hate this Austrian school thing and their branch,they see them as the worst sort economists on Earth,they see them dangerous for a real freemarket alternative,since their whole branch is so stupid and simplified that it spill over on them to,and the layman don´t know the difference between the schools and it gives us a bad name.No people like Lucas and Fama really hate Austrians,whole heartedly!" I thought about it and found it peculiar.But when i see people like this Robert Murphy,i actually understand what my friend told me.I guess a Robert Lucas don´t want to be mixed up such a guy. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-54356620624602007702013-03-16T11:52:03.441-07:002013-03-16T11:52:03.441-07:00So that Murphy guy is on it again???And get everyt...So that Murphy guy is on it again???And get everything wrong as usual!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-77578336279455617572013-03-16T04:23:29.964-07:002013-03-16T04:23:29.964-07:00Murphy has finally picked up the Ricardian Equival...Murphy has finally picked up the Ricardian Equivalence argument, eh? Maybe he reads the comments on here. <br /><br />Of course, you're absolutely right, RE requires Rational Agents with Rational Expectations (RARE) which are completely counter to Austrian theory. The Austrian theory, when it says anything about these policies, makes the claim that they will lead to hyperinflation and bank-runs. Obviously this isn't working out for some Austrians, so they temporarily turn New Classical when it suits them.Philip Pilkingtonhttp://www.nakedcapitalism.comnoreply@blogger.com