tag:blogger.com,1999:blog-6245381193993153721.post5671636804408883839..comments2024-03-17T00:23:24.896-07:00Comments on Social Democracy for the 21st Century: A Realist Alternative to the Modern Left: Mario Rizzo InterviewLord Keyneshttp://www.blogger.com/profile/06556863604205200159noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-6245381193993153721.post-74873856411048298682013-06-16T07:32:28.770-07:002013-06-16T07:32:28.770-07:00So because you can find some Austrians who talk as...So because you can find some Austrians who talk as though uncertainty doesn't exists - they all must ?<br /><br />"if business expectations are subjective and can be shattered, loanable funds theory doesn't work, because lower interest rates will not induce the necessary investment."<br /><br />If business expectations lower then this will affect the desire to borrow (and perhaps to lend) and this will affect the money rate of interest - but how does that undermine the whole theory, its part of the theory ! <br /><br /><br /><br /><br /><br />Rob Rawlingsnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-59011952712469470422013-06-15T13:58:24.392-07:002013-06-15T13:58:24.392-07:00"Like when Austrians say that macro concepts ...<i>"Like when Austrians say that macro concepts are wrong and then start talking about GDP or the unemployment rate."</i><br /><br />Something which I can confirm happens frequently with internet Austrians!<br /><br />My personal favourite is when we are told that aggregate demand is nonsense or meaningless, but -- hey presto! -- somehow Say's law is absolute truth, even though it presupposes the existence and meaningfulness of aggregate demand.<br />Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-58864168140440417002013-06-15T13:39:23.109-07:002013-06-15T13:39:23.109-07:00Exactly. It's such a farce. Like when Austrian...Exactly. It's such a farce. Like when Austrians say that macro concepts are wrong and then start talking about GDP or the unemployment rate.<br /><br />By the way, I'll also say that Schumpeter -- who many PKs like (don't ask me why...) -- is also completely incoherent on these points. You can't have your cake and eat it. I do wish people would be consistent. But this is far too much to ask of most economists -- especially Austrians, whose exposure to philosophy is confined... Mises... ugh! It's about as sophisticated as Rand.Philip Pilkingtonhttp://www.nakedcapitalism.comnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-29175235582548653182013-06-15T13:27:39.205-07:002013-06-15T13:27:39.205-07:00Rob Rawlings,
Post Keynesian critics know that Au...Rob Rawlings,<br /><br />Post Keynesian critics know that Austrians say they accept fundamental uncertainty or pay lip service to it, but the charge is they have not properly applied it to their theories and thought through the implications.<br /><br />E.g., if business expectations are subjective and can be shattered, loanable funds theory doesn't work, because lower interest rates will not induce the necessary investment.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-83436804108217251962013-06-15T12:59:09.394-07:002013-06-15T12:59:09.394-07:00"Once you accept fundamental uncertainty EVER..."Once you accept fundamental uncertainty EVERYTHING in the neoclassical/Austrian doctrine comes apart at the seams completely"<br /><br />Odd then that Mises should write in Human Action:<br /><br />"The uncertainty of the future is already implied in the very notion of action. That man acts and that the future is uncertain are by no means two independent matters. They are only two different modes of establishing one thing . . . If man knew the future, he<br />would not have to choose and would not act"Rob Rawlingsnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-88604134859321871862013-06-15T09:22:37.308-07:002013-06-15T09:22:37.308-07:00Frankly, I don't think there is any point in e...Frankly, I don't think there is any point in extending the olive branch at all. Those Austrians that are not doctrinaire are just sloppy. Once you accept fundamental uncertainty EVERYTHING in the neoclassical/Austrian doctrine comes apart at the seams completely.<br /><br />Prices cannot be determined in line with supply and demand in an uncertain environment. Thus they are inherently speculative or, what is the other side of the same coin, precautionary. Once we understand that the price system functions essentially as a series of insurance contracts (no, not ones calculated in line with known probabilities) and bets then none of the marginalist stuff makes sense.<br /><br />Also, marginal utility makes no sense outside of static time. So, any Austrian trying to argue that they take historical time into account and at the same time espouse marginalism is guaranteed to be a second-rate thinker who doesn't understand what marginalism is all about. Philip Pilkingtonhttp://www.nakedcapitalism.comnoreply@blogger.com