Austrian economics on RTE!

[sandar]

I still haven't got it why "all humans act" is so an important for Austrian economics?

And is it really so important that it is self referential? Is it?

I've also asked before: Why is the "all" so important? And does it mean: always?

Take other examples:

"Humans die." (Like all living beings.)

"Humans laugh." (Unlike other living beings.)

"Humans buy." (Unlike other living beings.)

"Humans eat." (Unlike, or like? other living beings?)

None of the above is self referential, but the problem how to decide whether only oneself is doing it, or whether it's indeed true for all, remains the same, doesn't it?
"Humans buy" seems to be the one most dependent on how a society is organised. What about the others?

How could we ever verify them, if "humans" means "all humans"? Or better: falsify them?

We can however add to them:

"Humans laugh when they find something funny."
"Humans eat regularly, unless they have nothing to eat."
"Humans die, once at the end of their life."
"Humans buy food and other items in most modern societies."

"Humans act frequently."
Not when they die.
"Humans act when they..."
What about laughing? It's observable. But is it acting?

Its game theory or an offshoot of it. There is no point in planning an economy or society on the basis that if you do x Y will occur, since if Y doesnt occur then x has failed.
And humans do not always act rationally, Marxism is a rationalist doctrine, humans are selfish and venal and irrational, if enough humans are that it wont work, so Austrian economnist believe its more important to predicate on the basis of how humans will act within the prevailinge conomic conditions than assume they will always act in a rational way. The thoery extends to society as the theiry is that while individuals may act in one way, society as a mass wont. Thats mathematics applied top economic and explained very badly by me.

[Christel]

"All humans act" is important for Austrian economics because they use it as the starting point of their logic and the base of their beliefs.

Now the reason that this is the case rather than all the other ones you mention is because it is either a-priori as Mises suggests or it is some type of special one time only empiricism as Rothbard suggests.

If they had chosen a different one they would have a very different type of economics. Take for example if they had started off with something like "humans form groups" or "humans form families". This would place importance on groups rather than just individuals and it would lead to very different theories.

Okay, and how exactly do they base their economic theory on "humans act"? I think that's what I'm missing.

And what would be your idea how an economic theory would look that is based on the alternatives you mention, or something else?

I find this very interesting, but am lacking the economics' knowledge.

I did study linguistics many years ago, when speach act theory was much talked about. Had nothing to do with it since a long time. I'm quite amazed to see Frege and Quine mentioned on a politics forum here, not that I ever studied them. I heard John Searle, and Karl Menger, who was the son of your Carl Menger I think, in Austria at the Wittgenstein Symposium, but was too young to understand what the significance of what they said was.

This thread reminds me of a few things that were discussed at the time re language, and when I read this thread, I thought economics is just another interactive system brought about by humans...

But it seems to work fifferently.

What I wanted to ask: Is there something like economic "ethics" in economics? I mean something like Paul Grices's cooperative principle and maximes?

http://en.wikipedia.org/wiki/Cooperative_principle

http://en.wikipedia.org/wiki/Gricean_maxims

[Christel]

Sandar: "Austrian economnist believe its more important to predicate on the basis of how humans will act within the prevailinge conomic conditions than assume they will always act in a rational way. The thoery extends to society as the theiry is that while individuals may act in one way, society as a mass wont."

Now, that sounds to me as if Austrian economics would say something like: "Never mind considering indiviuals or sporadic rational behaviour. Humans, and note the plural, will always act. That's enough to keep economy alive."

Is that what they mean??

[Seos]

Okay, and how exactly do they base their economic theory on "humans act"? I think that's what I'm missing.

I'll let one of them explain that.

And what would be your idea how an economic theory would look that is based on the alternatives you mention, or something else?

Heh, that's a big ask, so it won't be a true theory and will probably be very easily refuted.

Ok we'll take "Humans form families".
Considering humans form families and that the reason for this seems to be to continue the human race then we can deduce from that that the family unit is the most important unit in society and in the economy.


Ok, I was going to develop further but that'll do to show how it would be hugely different.

What I wanted to ask: Is there something like economic "ethics" in economics? I mean something like Paul Grices's cooperative principle and maximes?

Cooperative principle - Wikipedia, the free encyclopedia

Gricean maxims - Wikipedia, the free encyclopedia

No, in practise only the ethics of each individual economist is used in Economics.

In theory Economics is meant to describe and say what works whatever that is. So the economists says what the consequences of a certain economic policy will be and it's the politicians job to have ethics.

This is a failing in Economics in my opinion.
The consequences of Chicago Schoolers following this can be seen in south America and the former soviet bloc right after it collapsed. It is why Milton Friedman had connections and advised Pinochet but maintained that his advise wasn't to blame for any of Pinochet's evil policies.

But as I said people usually apply their own ethics to make up for it.

[Supermanpolitician]

Entire theory makes a lot of sense, but like anything only ever makes sense in a bubble. Would probably be appropriate in modern times. Jill Kirby makes some excellent points.

In reality a moderate somewhere between this and Keynes would be appropriate.

[20000miles]

The Austrian school of economics is for people who want to be economists but aren't good at maths or statistics.

I want to see the names of any Austrian economists who are good at maths, and reject it for reasons other than being bad at it.

Murray Rothbard, Ludwig von Mises.

[sandar]

the austrian school highlights the fact that any theiory which is constructed on paper can fail in the face of the human factor, that is to say how humans recat in a given situation.
It uses game theory to highlight that humans dont always act rationally when they are a collectiove, although they can as a group iof individuals.
It them em,phasis that the state relies on the collexctiove, and therefore may lean more towards the short term and irrational.
It is for this reason that the austrain scjhool believe in small government, believing that all the individuals will be smaretr acting in dividually than collectively.
In my view there is a lot of merit in the argument, and there was even more merit when they wrote it, but globalisation on a scale they cannot have envisaged and peak oil etc. mean thatt collectivism is nesecssary in many areas.
But the job of governments should be to deliver in those areas and not in things which are none of the states business, such as whether people eat too much, or who thwey have sex with.

[20000miles]

Entire theory makes a lot of sense, but like anything only ever makes sense in a bubble. Would probably be appropriate in modern times. Jill Kirby makes some excellent points.

In reality a moderate somewhere between this and Keynes would be appropriate.

Sadly this is not possible. Keynesian solutions to recessions involve stimulating consumption, increased government spending and inflation*.

The Austrian solution to recesssions involves stopping inflation, allowing wages and prices to fall, liquidating bad investments, cutting government spending and promoting savings.


[SIZE=1]*inflation here is used in its classical sense: expansion of the money supply[/SIZE]
[SIZE=1].[/SIZE]

[sandar]

Forcingw ages down in the modern world is flawed as a concept, increasingd emand in the economy is worth it, it has to be paid for and not cause inflation, but that is possible if done right, the austrians had much to recommend them, but the ultimate merit of their analysis is in relation to the way humans react, and in my view, there solution wont get people out of recession, but works at the mid point of the cycle toa great extent rather than at the start

[20000miles]

I'm pretty sure Mises levelled some criticisms at game theory, although it was still in it's infancy at the time. He also had some things to say about probability theory in Human Action.

They weren't maths illiterates you know.