tag:blogger.com,1999:blog-6245381193993153721.post3075921785306297575..comments2024-03-17T00:23:24.896-07:00Comments on Social Democracy for the 21st Century: A Realist Alternative to the Modern Left: Hayek on the Flaws and Irrelevance of his Trade Cycle TheoryLord Keyneshttp://www.blogger.com/profile/06556863604205200159noreply@blogger.comBlogger22125tag:blogger.com,1999:blog-6245381193993153721.post-7149872415453934682013-04-27T12:29:11.216-07:002013-04-27T12:29:11.216-07:00The problem with economists is that they have to b...The problem with economists is that they have to be either left wing or right wing. If you could shed that you would get much further.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-55152609242344683442011-06-30T04:09:24.796-07:002011-06-30T04:09:24.796-07:00"Why do you use the words of Kirzner and Lach...<i>"Why do you use the words of Kirzner and Lachmann and Hayek to defend the position that the ABCT can explain some cycles, not all cycles"</i><br /><br />You are confused or presenting a straw man argument.<br /><br />I do NOT defend or support the idea that ABCT "explains" some cycles. I do not belive it explains any cycles.<br /><br />I merely note the positions of various Austrians as relevant to my discussion.<br /><br />There is no contradiction.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-21249746874201940762011-06-30T04:06:22.870-07:002011-06-30T04:06:22.870-07:001950-1973 - 4.9%1950-1973 - 4.9%Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-19963185696171224442011-06-30T04:05:14.741-07:002011-06-30T04:05:14.741-07:00Average OECD real GDP growth:
1700-1820 - 0.2%
18...Average OECD real GDP growth:<br /><br /><a href="http://books.google.com.au/books?id=_MbRxCTlgp4C&pg=PA22&dq=bretton+woods+golden+age+unemployment+real+gdp&hl=en&ei=XVQMTumVJdHqmAXixsS2Dg&sa=X&oi=book_result&ct=result&resnum=3&ved=0CDUQ6AEwAg#v=onepage&q=bretton%20woods%20golden%20age%20unemployment%20real%20gdp&f=false" rel="nofollow">1700-1820 - 0.2%<br />1820-1913 - 1.2%<br />1919-1940 - 1.9%<br />1950-1073 - 4.9%<br />1973-1981 - 1.3%</a>Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-54192635823973409902011-06-30T04:01:05.892-07:002011-06-30T04:01:05.892-07:00"Golden age of Capitalism can refer to the pe...<i>"Golden age of Capitalism can refer to the period from approximately 1870 to 1914 ,"</i><br /><br />= red herring fallacy.<br /><br />That the expression is also used to refer to 1870 to 1914 does not refute anything I have said above.<br /><br />1945-1973 IS conventionally called the golden age of capitalism: it had real GDP and productivity growth superior to the 1820-1914 period.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-50993023230719065122011-06-30T03:57:08.782-07:002011-06-30T03:57:08.782-07:00ROFLMAO...
Here's an extract from the same Wi...ROFLMAO...<br /><br />Here's an extract from the same Wikipedia article.<br /><br />"In academic literature, the period is frequently and narrowly referred to as the post–World War II economic boom, though this term can refer to much shorter booms in particular markets. It is also known as the Long Boom, though this term is generic and can refer to other periods. The golden age of Capitalism is a common name for this period in both academic and popular economics books. However in older sources and occasionally in contemporary ones, Golden age of Capitalism can refer to the period from approximately 1870 to 1914 , which also saw rapid economic expansion. Yet another name for the quarter century following the end of World War II is the Age of Keynes."<br /><br />Note the reference to 1870-1914.<br /><br />ROFLMFAO........Balanoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-53587175489808848792011-06-30T03:56:15.546-07:002011-06-30T03:56:15.546-07:00Your idiotic claim:
"Firstly, there is the f...Your idiotic claim:<br /><br /><i>"Firstly, there is the false claim that 1945-1973 was the 'golden age of capitalism'. Did you borrow this technique from Hitler? I mean that if you repeat an outrageous lie brazenly and often enough, people will slowly start believing it to be the truth.</i><br /><br />This requires<br /><br />(1) that I "invented" the idea of a golden age of capitalism;<br /><br />(2) that I lied in speaking of such a period.<br /><br />In fact,<br /><br />(1) I did not lie or invent the concept;<br /><br />(2) the idea of a golden age of capitalism is an idea from mainstream economic history. All you need to do is type that expression into a serach engine or Google books;<br /><br />(3) it is based on the high real GDP growth, low unemployment and high productivity growth experienced in these years:<br /><br /><a href="http://books.google.com.au/books?id=PYO7Zz5tSJsC&pg=PA99&dq=bretton+woods+golden+age+unemployment+real+gdp&hl=en&ei=XVQMTumVJdHqmAXixsS2Dg&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCsQ6AEwAA#v=onepage&q=bretton%20woods%20golden%20age%20unemployment%20real%20gdp&f=false" rel="nofollow">“During the Golden Age of Bretton Woods, the growth rate was almost double the previous peak annual growth rate of the industrializing nations during the Industrial Revolution (from 1820 to 1913). Between 1950 and 1973 annual labor productivity growth was more than triple that of the industrial revolution and real GDP per capita in the developed (or OECD) nations grew 2.6 times faster than between the wars.<br /><br />The resulting prosperity of the industrialized world was transmitted to the less developed countries (LDCs) through world trade, aid, and direct foreign investment. From 1950 - 73, average growth in per capita GDP for all developing nations was 3.3 per cent, almost triple the growth experienced by the industrializing nations during the industrial revolution.”<br /><i>Macroeconomic causes of unemployment: diagnosis and policy recommendations</i>p. 99</a>Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-82662326794590071312011-06-30T03:46:41.266-07:002011-06-30T03:46:41.266-07:00"= gross distortion of Kirzner's words.&q..."= gross distortion of Kirzner's words."<br /><br />Crap. I just identified what he said and noted what he did not. Here are his words again.<br /><br />Kirzner: "If one were asked, does this theory necessarily explain each and every cycle, I would say no."<br /><br />I just replaced "necessarily" with "by necessity" which is a grammatically perfect replacement in the circumstances. You see distortions because your underlying theories are warped.Balanoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-20482353180988601672011-06-30T03:43:47.784-07:002011-06-30T03:43:47.784-07:00"You suppress Lachmann's next words:"..."You suppress Lachmann's next words:"<br /><br />ROFLMAO. Why should I suppress them? They are there for all to see. The statement "The Austrian theory is a theory of the strong boom" does not invalidate ABCT.<br /><br />Further, the statement<br /><br />"Undoubtedly, weak booms which ended when consumption failed to keep in step with production have occurred in history"<br /><br />only means that further theoretical development may be required for the explanation of weak booms.<br /><br />But then there you go deflecting the discussion from the boom-bust cycles and the phenomenon of "depressions" and their underlying causes to a discussion of strong and weak booms. Nice attempt at parrying a body blow to your nonsensical theories. Your desperation is showing.Balanoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-69676748379476792022011-06-30T03:40:52.018-07:002011-06-30T03:40:52.018-07:00"Note that he does not say that it does not e...<i>"Note that he does not say that it does not explain. He says that it does not BY NECESSITY explain."</i><br /><br />= gross distortion of Kirzner's words.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-38002370781643929452011-06-30T03:39:05.395-07:002011-06-30T03:39:05.395-07:00"Wrong:
http://en.wikipedia.org/wiki/Post%E2..."Wrong:<br /><br />http://en.wikipedia.org/wiki/Post%E2%80%93World_War_II_economic_expansion"<br /><br />A Wikipedia entry only shows that some people consider it to be so. That does not make it that. Laughable.Balanoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-76887409592623906372011-06-30T03:36:52.471-07:002011-06-30T03:36:52.471-07:00"It explains NO cycles, because there is no s..."It explains NO cycles, because there is no such thing as a natural rate of interest. Period."<br /><br />There goes your crappy explanation. There is such a thing as natural rate of interest, Sraffa's crappy denial of the same notwithstanding.Balanoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-44977303459664058472011-06-30T03:35:56.889-07:002011-06-30T03:35:56.889-07:00> "we do not maintain that the Austrian
&...<i>> "we do not maintain that the Austrian <br />> theory could explain every and any <br />> industrial fluctuation that has ever <br />> occurred"<br /><br />Note the emphasis on the 'could'. </i><br /><br />You suppress Lachmann's next words:<br /><br /><i>"The Austrian theory is a theory of the strong boom, it deals with its causes and consequences. <b>Undoubtedly, weak booms which ended when consumption failed to keep in step with production have occurred in history.”</b></i><br />Ludwig M. Lachmann, Capital and its structure, p. 113ff. <br /><br />Therefore in practical terms ABCT does NOT explain all cycles.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-56549439009192636752011-06-30T03:33:32.057-07:002011-06-30T03:33:32.057-07:00"Firstly, there is the false claim that 1945-...<i>"Firstly, there is the false claim that 1945-1973 was the 'golden age of capitalism'."</i><br /><br />Wrong:<br /><br />http://en.wikipedia.org/wiki/Post%E2%80%93World_War_II_economic_expansionLord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-30416561886264051552011-06-30T03:29:30.967-07:002011-06-30T03:29:30.967-07:00"Now please list out the cycles that the theo...<i>"Now please list out the cycles that the theory does not explain. "</i><br /><br />It explains NO cycles, because there is no such thing as a natural rate of interest. Period.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-38598752094854195462011-06-30T03:25:40.059-07:002011-06-30T03:25:40.059-07:00"The Trade Cycle cannot be appropriately desc..."The Trade Cycle cannot be appropriately described by means of one theoretical model" <br /><br />By all means, do come up with a model. Just let its theoretical foundations be strong. 'Subjective expectations' and 'animal spirits' do not constitute a model.<br /><br />"we do not maintain that the Austrian theory could explain every and any industrial fluctuation that has ever occurred"<br /><br />Note the emphasis on the 'could'.Balanoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-52064177493403245222011-06-30T03:18:24.889-07:002011-06-30T03:18:24.889-07:00Lachmann:
"The Trade Cycle cannot be appropr...Lachmann:<br /><br /><i>"The Trade Cycle cannot be appropriately described by means of one theoretical model" ...</i><br />Ludwig M. Lachmann, <i>Capital and its structure</i>, p. 100ff.<br /><br /><i>“In the first place, <b>we do not maintain that the Austrian theory could explain every and any industrial fluctuation that has ever occurred.</b> Such a view of course would be incompatible with our plea for eclecticism. The Austrian theory is a theory of the strong boom, it deals with its causes and consequences. Undoubtedly, weak booms which ended when consumption failed to keep in step with production have occurred in history.”</i><br />Ludwig M. Lachmann, <i>Capital and its structure</i>, p. 113ff.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-43109804541309830622011-06-30T03:16:01.180-07:002011-06-30T03:16:01.180-07:00"It’s quite another to claim that historicall..."It’s quite another to claim that historically every downturn is to be attributed to that particular theory. That does not necessarily follow. If one were asked, does this theory necessarily explain each and every cycle, I would say no."<br /><br />Why do I feel like strongly agreeing with him? The important point, however, is the use of the phrases "is to be", "does not necessarily follow" and "necessarily explain". Note that he does not say that it does not explain. He says that it does not BY NECESSITY explain.<br /><br />It just so happens that it explains. ROFLMAO.Balanoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-26952063827316552812011-06-30T03:13:14.159-07:002011-06-30T03:13:14.159-07:00"The golden age of capitalism (1945-1973) was..."The golden age of capitalism (1945-1973) was not characterised by “rapidly accelerating inflation”: inflation was low, subdued and there was no tendency whatsoever towards its acceleration for virtually all the period. It was only in 1968 that inflation in many countries started to accelerate."<br /><br />Firstly, there is the false claim that 1945-1973 was the 'golden age of capitalism'. Did you borrow this technique from Hitler? I mean that if you repeat an outrageous lie brazenly and often enough, people will slowly start believing it to be the truth.<br /><br />Secondly, there is the ever present thorn in the flesh - price inflation is not an increase in the price level. It is prices being higher than they would be had the prior inflation (increase in the money supply) not happened. At least, that's the way Austrians view it. Showing prices not increasing is not an argument against that viewpoint.Balanoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-41577280524977869842011-06-30T03:05:25.375-07:002011-06-30T03:05:25.375-07:00Fine. Now please list out the cycles that the theo...Fine. Now please list out the cycles that the theory does not explain.Balanoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-82634128813132204832011-06-30T03:01:32.509-07:002011-06-30T03:01:32.509-07:00"Actually, it is you who claims that ABCT doe...<i>"Actually, it is you who claims that ABCT does not explain all business cycles who has to do this."</i><br /><br />False. That was also the view of <br /><br />(1) Ludwig Lachmann, <br />(2) Israel M. Kirzner<br />(3) Joseph Schumpeter and<br />(4) Hayek himself by the late 1970s.<br /><br />For Kizner's statement:<br /><br />AEN: Do you accept the idea that interest-rate manipulation by the central bank can cause distortions in the structure of production?<br /><br />KIRZNER: Certainly the Austrian cycle theory showed brilliantly how this can happen. But it’s one thing to develop a theory which could explain a downturn. <b>It’s quite another to claim that historically every downturn is to be attributed to that particular theory. That does not necessarily follow. If one were asked, does this theory necessarily explain each and every cycle, I would say no.</b><br /><br />http://mises.org/journals/aen/aen17_1_1.aspLord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-41174074886439340102011-06-30T02:54:01.266-07:002011-06-30T02:54:01.266-07:00"Yet when modern Austrians are pressed to ide..."Yet when modern Austrians are pressed to identify real world cycles that are not explained by ABCT, most of them are reduced to dumbfounded silence."<br /><br />ROFLMAO, Actually, it is you who claims that ABCT does not explain all business cycles who has to do this. Your explanations, in particular, are especially hilarious.<br /><br />"(1) wage–price spirals"<br /><br />What caused the "wage-price" spirals?<br /><br />"the speculative activity caused by the break up of Bretton Woods in 1971"<br /><br />The breakdown of Bretton Woods did not usher in a pure fiat money regime with unlimited potential for growth in money supply. The breakdown of Bretton Woods had nothing to do with the US running out of gold reserves to redeem its obligations to foreigners leading to Nixon unilaterally closing the Gold window. That in turn had nothing to do with the massive monetary inflation in the form of fiduciary media in the 1950's and 60's.<br /><br />"the oil shocks"<br /><br />Yeah!! The oil shocks had nothing to do with the severe debauchment of the dollar, leave alone the potential for further and even more severe debauchment under a pure fiat money regime. The move to pure fiat from the gold exchange standard had nothing whatsoever to do with it.<br /><br />ROFLMFAOBalanoreply@blogger.com