tag:blogger.com,1999:blog-6245381193993153721.post3968650942092129114..comments2024-03-17T00:23:24.896-07:00Comments on Social Democracy for the 21st Century: A Realist Alternative to the Modern Left: Kirzner on Austrian Business Cycle TheoryLord Keyneshttp://www.blogger.com/profile/06556863604205200159noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-6245381193993153721.post-22183181334602137082011-06-01T09:03:23.104-07:002011-06-01T09:03:23.104-07:00I think you are using 'downturns in the busine...I think you are using 'downturns in the business cycle' and 'recessions' interchangeably, when I think I just demonstrated that they are not (theoretically) equal. {Sidebar: Recessions aren't <i>caused</i> by ABCT; rather, ABCT, like any other theory, can only be used to <i>explain</i> them.}<br /><br />As for your question on actual examples, the easiest is to point to Japan right now. <a href="http://www.japantoday.com/category/business/view/japans-jobless-rate-up-to-4-7-in-april" rel="nofollow">Unemployment has gone up</a>, and <a href="http://online.wsj.com/article/SB10001424052702303745304576356210620434434.html?mod=googlenews_wsj" rel="nofollow">production fell sharply</a>, although it seems to be picking up. I don't think a lot of Austrians would disagree with me about this. <br /><br />I don't feel comfortable speaking about your post-WWII and Volcker examples as I don't know enough about the history there.Ashnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-86947644488510552082011-05-31T21:21:04.422-07:002011-05-31T21:21:04.422-07:00"If by 'recession' you mean a sudden ...<i>"If by 'recession' you mean a sudden decrease in employment and investment, then non-ABCT scenarios could include wars, natural disasters, breakdown of society, etc. "</i><br /><br />I want actual examples of downturns in the business cycle over the past 150 years in any country you like that you think are <i>not</i> caused by ABCT.<br /><br />If an Austrian can provide no real world examples, then my suspicion is that the person in question is just another Austrian ideologue who actually explains all real world recession by ABCT. <br /><br />E.g., do you think post-WWII US inventory recessions were caused by ABCT? That the Volcker-induced US recessions of 1980 and 1981-1982 were really just caused by ABCT when they were obviously caused by Volcker's experiment with monetarism?Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-3258762480330886022011-05-31T16:55:24.029-07:002011-05-31T16:55:24.029-07:00FWIW, Kirzner has said that the two most important...FWIW, Kirzner has said that the two most important books in Austrian Economics written between O'Driscoll and Rizzo's 1985 book and 2003 or so when IK retired were my book and Roger Garrison's. So perhaps Roger and I addressed a number of his concerns?Steven Horwitzhttps://www.blogger.com/profile/00470758334242360804noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-16249089694536057882011-05-31T10:18:55.679-07:002011-05-31T10:18:55.679-07:00"What recessions in your opinion aren’t expla..."What recessions in your opinion aren’t explained by ABCT?"<br /><br />If by 'recession' you mean a sudden decrease in employment and investment, then non-ABCT scenarios could include wars, natural disasters, breakdown of society, etc. Bob Murphy explains a possible "non-ABC" scenario could happen in Ron Paul becomes president, <a href="http://consultingbyrpm.com/blog/2011/05/even-supercore-inflation-might-not-do-the-trick.html" rel="nofollow">here</a>.<br /><br />Is this the kind of answer you were looking for?Ashnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-87647357094251870812011-05-31T04:37:24.204-07:002011-05-31T04:37:24.204-07:00"not only proved to be vulnerable to the Camb..."not only proved to be vulnerable to the Cambridge capital critique"<br />Why? The overall "lengthening" of the capital structure remains an empirical question, even if some reswitching happens.<br /><br />Bob Murphy on reswitching and Hayek:<br />http://mises.org/daily/1148Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-74820662151380822862011-05-31T00:57:32.737-07:002011-05-31T00:57:32.737-07:00Iain, very nice point, and, yes, I should have pic...Iain, very nice point, and, yes, I should have picked up on that.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-66183972890483269422011-05-31T00:51:36.209-07:002011-05-31T00:51:36.209-07:00"Otherwise, the Austrian theory of the busine..."Otherwise, the Austrian theory of the business cycle is a macro theory. It’s an equilibrium theory."<br /><br />I think that this is a significant point and I'm surprised you did not raise that as worthy of comment. This is a significant admission and proves post-Keynesian critiques of "Austrian" economics right.<br /><br />For example, the "Austrian" theory of the business cycle, "not only proved to be vulnerable to the Cambridge capital critique . . . , but also appeared to reply upon concepts of equilibrium (the 'natural rate of interest', for example) that were inconsistent with the broader principles of Austrian economic theory." (J.E. King, <i>A history of post Keynesian economics since 1936</i>, p. 230)<br /><br />And I should note that von Hayek admitted as much when Piero Sraffa destroyed his arguments back in the early 1930s.<br /><br />Still, given that I have pointed this out for some time it is nice to see it confirmed by a leading light of the school...<br /><br />Iain<br /><a href="http://www.anarchistfaq.org.uk" rel="nofollow">An Anarchist FAQ</a>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-8986331143730604602011-05-30T23:06:11.169-07:002011-05-30T23:06:11.169-07:00Anonymous,
Thank you for your comment, and perhap...Anonymous,<br /><br />Thank you for your comment, and perhaps you can also give your answer:<br /><br />What recessions in your opinion <b>aren’t explained by ABCT?</b><br /><br />Cna you think of any? I have yet to meet an Austrian who will answer that question.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-86339954355526601472011-05-30T22:59:38.726-07:002011-05-30T22:59:38.726-07:00Those questions have been answered, and I'll l...Those questions have been answered, and I'll look for the links to the corresponding papers.<br /><br />Also, Kirzner is still alive, his thoughts on modern Austrians aren't hidden. <br /><br />A few quips: Points 2-4 seem to be coming off as objective facts, versus notes relating to an interview with Kirzner.<br /><br />With 2, I'd also say that the way you're using non-Austrian is misleading. The aspects may not be exclusive to Austrian-economics but that doesn't mean they aren't considered a part of Austrian economics. Methodological individualism, for example, isn't an exclusively-Austrian methodology, yet it is one of the pillars of the Austrian school.<br /><br />And 3, I don't think that is what Kirzner is saying at all. One doesn't need an orthodox reading of ABCT to believe that the ABCT can explain certain recessions is a better way of saying it.Anonymousnoreply@blogger.com