Friday, April 15, 2011

Who pays for "the kind of society we want"?

If anyone believes that Paul Krugman is nothing more than a shill for the Democratic Party, I think today's column would provide needed ammunition for that point of view. Furthermore, I believe that we also better understand Krugman's "vision" for the rest of us, or should I say the "vision" of the life he wants to have imposed on us.

First, however, let me say that NEITHER party in Washington is "serious" about the federal budget. For all of Krugman's claims that the Congressional Budget Office actually consists of "people who actually understand budget numbers" (at least when they write something Krugman likes), the latest stuff from the CBO is based upon pure fantasy.

As the CBO has been doing for as long as I can remember, it frontloads the revenues from tax increases and backloads the costs, and even then it is not honest about the real costs that will come about because of federal policies. That Krugman would be shilling for this nonsense tells us more about Krugman than it does about the CBO numbers. (I also suspect Krugman watches "Animal House" once a week in a belief that the band at the end of the movie finally will be successful in marching through the wall in the alley. The chance that the band will break through is about as likely as the chance that the CBO is going to give us an accurate depiction of the future.)

Second, as I read through this, I realize that Krugman really is not interested in budget numbers or whose plan actually will get spending under control and cut the federal deficit. No, Krugman gives away his viewpoint with the following:
The president’s proposal isn’t perfect, by a long shot. My own view is that while the spending controls on Medicare he proposed are exactly the right way to go, he’s probably expecting too much payoff in the near term. And over the longer run, I believe that we’ll need modestly higher taxes on the middle class as well as the rich to pay for the kind of society we want. (Emphasis added)
What is the "kind of society we want"? Or, perhaps, I should ask, "Who is 'we'?" Furthermore, who pays for this kind of society, and what if one has a different viewpoint?

As I read that statement, I recalled a recent column by Thomas Sowell (who, unlike Krugman, actually invokes real economic terms in his writings, like "opportunity cost" and Law of Scarcity). In writing on the effects of higher tax rates, Sowell points out that the issue with people like Krugman is not the actual revenues raised, but rather the economic and social vision that these people have -- and have for the rest of us, whether or not we want that "vision" imposed upon us. Sowell writes:
For more than 80 years, the political left has opposed what they call "tax cuts for the rich." But big cuts in very high tax rates ended up bringing in more revenue to the government in the Coolidge, Kennedy, Reagan and Bush 43 After all, "the rich" paid that larger sum of taxes only because their incomes had risen. Their paying a higher share of all taxes doesn't matter to the "progressives," who see high tax rates as a way to take a bigger bite out of the incomes of higher-income people, not just provide more revenue to the government.
However, he further notes:
Tax rates are meant to make an ideological statement and promote class-warfare politics, not just bring in revenue.

There has been much indignation on the left over the recent news that General Electric paid no taxes, despite its large amounts of profit. But another way of looking at this is that high tax rates on paper do not mean high tax revenues for the government.

The liberal answer to budget deficits is almost always to raise tax rates on "the rich," in order to bring in more revenue. The fact that higher tax rates have often brought in less revenue than before is simply ignored.

Our corporate tax rates are higher than in many other countries. That may have something to do with the fact that many American corporations (including General Electric) expand their operations in many other countries, providing jobs – and tax revenues – in those other countries.

But high-tax ideologues don't see it that way. They would be horrified at the idea that we ought to lower our corporate tax rates, just so that more American businesses would do more of their business at home, providing more Americans with much-needed jobs.

To ideologues, that is just a cop-out from the class-warfare battle. It is far more important to them to score their political points against "the rich" or "Wall Street" than that a few million more Americans out of work would be able to find jobs.

The idealism of the left is a very selfish idealism. In their war against "the rich" and big business, they don't care how much collateral damage there is to workers who end up unemployed.administrations. This included more – repeat, more – tax revenue from people in the highest income brackets than before.
You see, the "vision" that Krugman has for us is of a society in which everything is provided administratively. The government plans our lives, tells us what we should eat, what we should wear, what we should use for transportation, and, frankly, what we should believe.

An economy, in Krugman's view, is nothing more than a mass of stuff that just happens. The mines, the factories, the capital, the farms, and the stores just appear, and they will operate just fine as long as the government manages to throw enough money at them to keep the "spending" machine in operation.

The entrepreneur, in Krugman's view, is not someone who moves resources from lower-valued to higher-valued uses while in search of a profit. No, the entrepreneur is a parasite, someone who works outside the Vision of the Anointed Ones (like Krugman) who are working to create the society that we should have.

I have come to believe that Krugman thinks that incentives really don't matter, and that one can have a great economy if the government just uses enough coercion, throws enough "uncooperative" people into prison, and confiscates enough wealth from "parasites" who actually create something. Here is someone who really thinks that price controls are an effective way to lower real costs, and that price controls and the like have no negative effects at all.

This is not economics, and it certainly is not the economics of a free society. However, people like Krugman believe that "freedom" is nothing more than government provision of everything -- and government attacks on the liberty of anyone who might disagree with what Sowell calls, "The Vision of the Anointed."

In the end, Krugman's "kind of society we want" is one in which everyone works for the state, whether or not one actually is a government employee. Like all Progressives, he believes that the highest measure of one's being is to support the "progressive" state, and if you don't like it, well, there is a nice jail cell waiting for you.

69 comments:

Bob Roddis said...

It seems to me that the socialists and the Keynesians are the ones stuck in an other-worldly religion. They can understand private property, thrift and scarcity in their own lives, homes and financial affairs. However, they have a quasi-religious belief that the state has magic powers which eliminate all of these self-evident worldly restraints. And, of course, it is they who must be in charge of the magical world of the future. This is the fundamental difference we have with these people and which is why they will never respond to facts, logic or evidence. Their magic statist world is not constrained by facts, logic or evidence and they would just as soon kill you as to admit that.

Rothbard explained that Marxism was in truth an “end-time” religious belief.

http://www.lewrockwell.com/rothbard/rothbard206.html

I continue to believe that Keynesianism is simply a fix of Marxism which still mandates control by the “intellectuals” and magic bureaucrats, but allows the masses a longer leash. The claims of Abba Lerner's supporters that he is the real face of the Keynesian revolution further supports that view.

The reason they will forever reject the Austrian School is because the real world of acting man is based upon the totally mundane and unimpeded existence and activities of plain ol’ average people. Since we totally reject allowing these “intellectuals” the power to impose their magical Keynesian world devoid of property, thrift and scarcity upon the masses, they get just a little upset with us about that.

That is what and who we face.

TonyFernandez said...

Thomas Sowell has to be one of the best reads when it comes to his writings about the elite of this country. His economic explanations expose the true intent of these people in power. I know, I know, I don't agree with him on everything either, but he is an invaluable contributor when it comes to this kind of stuff. We need to pick our battles, and when it comes to Krugman or Sowell, I'll pick Sowell any day.

http://teconom.blogspot.com

Anonymous said...

I failed to see where cutting taxes raised revenue. At least in real dollars.

Anonymous said...

Murray Rothbard himself rejected the idea that lowering tax rates necessarilly leads to an increase in tax revenue.

And the last thing he hoped for would be any increase in tax revenue from lowered tax rates.

Anonymous said...

Typical Austrian - you forget about democracy. Far different from the Soviet Politburo.

TonyFernandez said...

Democracy blows. It just heightens the illusion that the general will has any authority over the individual. It in effect tries to justify coercion. We would all be better off without the menace known as democracy.

http://teconom.blogspot.com

Bob Roddis said...

Democracy is two tigers and a lamb voting on what's for dinner.

Note that statists NEVER think about such things (because they rarely think at all).

Mike Cheel said...

You cannot even call it a democracy in the US. The founding fathers never did. We can't call it what they called it (republic) either.

Also, Gary North had a pretty good article on the constitution the other day if anyone missed it.

http://www.lewrockwell.com/north/north965.html

Anonymous said...

True colors revealed. What do you think about democracy Billy?

Bob Roddis said...

We haven’t learned our lessons from APLerner and Warren Mosler:

“Taxes function to regulate aggregate demand, not to raise revenue per se. In other words, the government taxes us, and takes away our money, to prevent inflation, not to actually get our money in order to spend it. Restated one more time: Taxes function to regulate the economy, and not to get money for Congress to spend.” Page 30.

http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf

I can't believe that no one gets that yet.

Anonymous said...

Taxes regulate the level of inflation? creepy sounding.


Not only in the U.S, but other countries have or have had very low marginal tax rates but without having inflation.

Bob Roddis said...

Just so everyone understands, when I quote Mosler or AP Lerner, I may or may not be joking.

Anonymous said...

Billy I am amazed at your accusations against Krugman when you write nonsense like "Krugman believes that 'freedom' is nothing more than government provision of everything."

As with all your critiques of Krugman - find me one example where Krugman believes government should provide everything. Or that deficits don't matter in the long term. Or that housing had nothing to do with the financial collapse. Or that he thinks that if we ONLY taxed the rich the debt would be eliminated.

You are not a serious thinker, and your cronies on this post are just caught up in their own ideological hype that they can't see plain old facts and reality.

Then you have people saying that democracy should be eliminated. Now whose the radical!

Anonymous said...

Of course bob, any proponent of MMT/the claptrap theory itself is certainly joke wothy

Anonymous said...

This statist who calls prof Anderson “billy” is anything but a serious thinker
We have a republic, not a democracy. No one is saying eliminate that, nor are we talking about eliminating a system of government that we really don’t even have. Just because people vote for statism, does not make it legitimate.
Oh wait, 50.1 % of the people voted in favor of a law that makes it legal to kill Jews! Don’t like it? Well That’s democracy! Oh wait, now you want to get rid of democracy? Who’s the radical now?
Deficits matter just as much during a recession as they do any other time, so who cares about what krugman thinks in the “long run”
Neither will krugman admit that the housing bubble was caused by the artificially low interest rates and money dilution on behalf of the fed, so even if krugman acknowledges the role housing had in the crisis, he will never understand the fundamental cause of it.
Yes, he basically says what the other statists say: Soak it to the rich, cut the military, create “advisory panels” of so called experts to somehow reign in health care costs by administrative fiat, maybe waving a magic wand or something, whoever those people will be, but who really cares because (as Hayek points out, they can’t possess all the relevant knowledge that the market has, so their existence in these “cost cutting panels” will not rein in costs, only markets can. Maybe if they start rationing care like they do in Europe and Canada, but I digress.

William L. Anderson said...

When has Krugman ever spoken about individual liberty? Ever?

He has ridiculed Ron Paul (calling him a racist and worse), he openly ridicules anyone who believes that the TSA is out of control, and I never once have read anything from him that does anything but attack anyone who believes that state control of our personal decisions destroys our freedoms.

Oh, and if you call me "Billy" again, I will start changing my policies and eliminate your posts.

Please point out one Krugman column in which he actually advocates liberty. And I don't mean the welfarist "freedom from want." I mean individual freedom.

Alan Chapman said...

I'm unaware of an example of Krugman explicitly asserting that the State should organize society. However, it's implicit in his multitude of articles. As is often the case with such people, Krugman is seemingly incapable of properly analyzing context which results in his conflation of correlation with causation (eg. http://krugman.blogs.nytimes.com/2010/02/03/what-small-government-looks-like/).

In 1850, Frederic Bastiat noted that certain thinkers, "...look upon society as an artificial creation of the legislator's genius."

That's precisely how Krugman thinks.

Bob Roddis said...

The sad part of all this is:

1. Krugman employs virtually the same style of argument as “Anonymous” who calls Prof. Anderson "Billy"; and

2. Of the tens of thousands of people who read Krugman’s blog and articles, no Krugman supporter in my recollection has ever called out Krugman regarding his constant misrepresentation of his opponents’ positions.

Anonymous said...

So Krugman ridiculous Ron Paul, a figure considered by many to be on the fringe of political discourse, and an outspoken liberatian and somehow that means that Krugman is against freedom?! If i criticize one war does that mean I hate the troops?

Then you also engage in another typical logical fallacy - reversing the burden of proof when it is utterly ridiculous to do so. The burden rests on the one making the outrageous statements - that Krugman opposes all freedom because he believes in a role for government.

Besides, Krugman has received lots of flack from the Left over his support of free trade, and I am pretty sure that if you asked him whether the government should regulate the sale of ipods he would say no.

And I will call you William, but if this is level of your causal analysis you are a shoddy professor. And this is a blog (hey, like Krguman's which you persistently try to convince is his academic work), so I prefer to be less formal.

@anon you are confusing liberal democracy (or constitutional democracy) with republicanism. Republicanism is based on the principle of representative democracy and in our case federalism. Here is what I was responding too, a post by Tony Fernandez -

"Democracy blows. It just heightens the illusion that the general will has any authority over the individual. It in effect tries to justify coercion. We would all be better off without the menace known as democracy."

These are the type of people who William Anderson's arguments resonate with.

Another Anonymous said...

Restated one more time: Taxes function to regulate the economy, and not to get money for Congress to spend. Yes, it is hard to believe that anyone believes anything different. Look at the dollar bill in your pocket. The government printed it. How can anyone think that the government needs someone else's money in order to spend? Where does money come from, if not governments? Where did it ever come from? When was money ever something that didn't ultimately come from governments. Answer: Never.

Anonymous said...

@Bob Roddis

Well you are William Anderson's number one fan. But there you did that same logical fallacy thing - the hypocrisy problem. It is basically an elevated "i know you are but what am I type of argument."

I would gladly criticize Krugman on similar grounds. But, even if I don't it does not lessen my sound criticism of W. Anderson's ridiculous arguments.

Tel said...

When was money ever something that didn't ultimately come from governments. Answer: Never.

That's exactly correct, err if you ignore thousands of years where gold and silver were exchanged as universal currency... along with a whole host of commodity based currencies such as iron, copper, salt, tea, alcohol, etc.

But yeah, if you ignore all the counter examples, that's absolutely spot on.

Lee said...

Your unwillingness or inability to take on Krugman with an economic model or formula only makes Krugman look smarter than you.

Put another way, Dude, 3 months of your column and no economics at all. Give me a formula -- a freakin' number would be nice -- or you'll just give whoever these "Austrians" you hide behind look dumb too.

Bala said...

@Lee,

How hilarious!! Please show us the 'economics' in Krugman's posts of the last 3 months. That will explain why you don't find economics here.

Oh, wait!!! What IS economics in the first place? You seem to be talking of formulae. Since when did 'formulae' get into economics?

Anonymous said...

Those prattling about "democracy" seem to think that the United States is, in fact, a democracy. It's not--it's not even a republic, really. It's more of an oligarchy/technocracy hybrid disguised as a democracy:

http://www.fredoneverything.net/TACDemocracy.shtml

Bob Roddis said...

Economic "models"?

Roger Garrison has models:

http://www.auburn.edu/~garriro/macro.htm

Anyone who wants a "formula" clearly hasn't the slightest familiarity with Austrian concepts. Which is par for the course and without exception.

Mike Cheel said...

I still don't understand how anyone can sit there and defend the state when all you have to do is look around and see it isn't working.

Anonymous said...

Mike, it's working perfectly well for some people, and we shouldn't be surprised that they--along with their paid hacks and unpaid dupes--go to such great lengths to defend it.

Anonymous said...

Great, look at all the "intelligent" conversation the thin-skinned William Anderson has attracted (to William, you threatened to pull down my posts if I referred to you as Billy. Have you ever read the comments on Krugman's blog? Thin-skinned you are indeed, about as thin as Austrian "Economics").

You have one person who thinks that economics is basically all theoretical/philosophical and not empirical or even mathematical (and I don't mean only forumales or models). You have another who blatantly says democracy is a mistake. And then you have some people who are making claims about the "state," clearly conflating the state with the regime (which is democratic).

I guess their vision of the future is statelessness - Austrianism taken to its natural limit - Somalia! Or is that too hyperbolic for you?

Mike M said...

Anonymous, it’s not hyperbole you spouse just ignorance. I mean that in the pure definitional sense not the pejorative. I continue to be amazed at the historical ignorance of this country’s founding constitutional premise and economics. Then again I shouldn’t be so tough as it appears we don’t teach it anymore or, what is taught, is statist garbage.

Economics is about human behavior and its interaction in the marketplace. Unless you believe you can distill human action into a mathematical construct, economics is not just about math.

I believe you miss the point the writer made about democracy being a mistake. If you believe we are living, and supposed to live, in a democracy, then yes that is a mistake. We are supposed to live in a constitutional republic at the federal level with democracy at the local level restrained by the Constitution, both Federal and State. Democracy unrestrained by a Constitution is nothing but mob rule.

There is no conflating respects discussion of the State and the regime. The State and regime are now involved in virtually every economic aspect of your life. I recently returned from DC after calling on several Congress people. The vast majority of these people, regardless of party, operate under the premise that there are NO limitations on their authority or ability to insert themselves in any aspect of your life.

The political equivalent of the Austrian philosophy is LIBERTY protected by a written Constitution. To equate it with statelessness is shallow, sophomoric, simpleton thinking. (actually lack thereof)

Bob Roddis said...

Anonymous(Billy) is so utterly clueless that it's truly pointless to respond to him. Somolia has a long tradition of strict enforcement and protection of property rights, contract rights and sound money for even the most powerless of its population.

Right.

These non-Austrians are so freakin' dumb, I truly wonder how they tie their shoes in the morning without help.

Is it asking too much to find JUST ONE non-Austrian who has the slightest understanding of basic Austrian and/or libertarian concepts? I guess so.

Mike Cheel said...

@Anonymous - April 17, 2011 10:16 AM

I understand that it is working as intended for a small handful of (extremely rich \ powerful) people. But the shills on these forums are not them and even tend to believe the official stories given out.

On the other hand, maybe I am wrong. Maybe they are in that small group. The way they defend it you would think they were.

Bala said...

OMG!!! How much of this nonsense do we put up with just to educate these imbeciles....

"You have one person who thinks that economics is basically all theoretical/philosophical and not empirical or even mathematical (and I don't mean only forumales or models)."


Yes, you economic empty vessel (no wonder you make this much noise). Economics is a branch of praxeology or human action. It studies the consequence of the FACT that human beings ACT. Its method is DEDUCTIVE REASONING. Mathematics has NO ROLE to play in formulating Economic Theory. To boo, empirical data tells you nothing about the causal relationships that Economic Theory explains. Even worse, data neither proves nor disproves a theory. Hayek made this point looooooong ago in "Monetary Theory and the Trade Cycle". Of course, I don't expect ignoramuses brainwashed by mainstream "education", though a better term would be indoctrination because all that 'students' of that school of nonsense learn is to memorise the mumbo jumbo and parrot it out like gawking idiots.

"You have another who blatantly says democracy is a mistake."

And if he said that, he is darned RIGHT. I wonder which doofus would deny that democracy is 2 wolves and a sheep sitting together and voting on what's for dinner.

" And then you have some people who are making claims about the "state," clearly conflating the state with the regime (which is democratic)."

That the State is democratic makes no difference to the fundamental factual point that it is the machinery of oppression and repression; that it holds a monopoly over the use of force in its territory and hence is fundamentally criminal in nature.

"I guess their vision of the future is statelessness - Austrianism taken to its natural limit - Somalia! Or is that too hyperbolic for you?"

It's not hyperbolic. It's IDIOTIC. Hope I make myself adequately clear. Now.... go get yourself an education.

What a freaking jerk!!!

Bala said...

Corrections

"To boot,..."

and

"Of course, I don't expect ignoramuses brainwashed by mainstream "education", though a better term would be indoctrination because all that 'students' of that school of nonsense learn is to memorise the mumbo jumbo and parrot it out like gawking idiots, to get something as simple as this."

I'm sorry. I let my anger get the better of me.

Anonymous said...

@Bala

Really? That is your argument? You are going to lecture me about social science methodology? What is your background? I would gladly challenge you on all of this.

Deductive reasoning is NOT the foundation of social inquiry, and neither is mathematics. I in fact am more of a qualitative researcher. But, theoretical economics mean nothing without empirical testing. Austrian economics rests on assumptions about human behavior that just do not prove themselves in empirical work. Mathematics has its place, as a tool to sharpen our thinking and make things more systematic.

Most social science engages in a mixture of deductive and inductive theorizing - or an interaction between theory and data. Data on its own does not disprove a theory, but that is assuming a Popperian standard for research instead of for instance Lakatos. Theories cannot be tested against the data used to generate them, and cumulative theory that disproves the inner core of a theory is enough to reject that theory.

Besides, the standard you claim is for someone to come up with a completely deductive argument and for all to accept it as law. Theory, absence any empirics is useless.

And then you engage is some asinine equivocation between the state as oppressor and democracy. If you have some brilliant alternative to the democratic state, by all means share it with us. It also seems that you cannot tell the difference between a social compact and an oppressive state. Tocqueville called it willful bondage. I guess law is tyrannical. And then you get into Max Weber with a definition of the state as the monopoly of repression. Again, do you have some great alternative of a state that never coerces that works?

So thanks for challenging my education, it is clearly much more advanced than yours.

Bala said...

@Anonymous,

You are indeed as asinine as they get. Go stuff it if you think deductive reasoning is not the foundation of economics. Read Human Action of you care to or go find the nearest ocean to drown yourself in.

You doofus.... Please DEFINE economics in the first place. You just don't seem to understand the difference between economic chronicling and ECONOMICS.

"Most social science engages in a mixture of deductive and inductive theorizing - or an interaction between theory and data."

Try telling that after reading HA, you moron.

Please tell me how empirical data can explain causality, especially in the social sciences before you go off on any further rants. Go ahead and open this book at least now... http://mises.org/books/monetarytheory.pdf

And talk of appeals to authority. You top the charts with this...

"You are going to lecture me about social science methodology? What is your background?"

What a prize idiot!!!

Bala said...

"If you have some brilliant alternative to the democratic state, by all means share it with us."

You jackass!! That's as simple as NO STATE. Get it? Now go find the nearest ocean to drown in.

Bala said...

OK Genius,

I'll make it simpler for you. Please explain how empirical evidence can prove or disprove a theory.

Bala said...

"Theory, absence any empirics is useless."

Empirical data without a theory to make sense of it with is garbage. Get it? Ever tried questioning a theory based on sound axioms? If you haven't yet done so, make a start by trying to deny the action axiom.

Anonymous said...

My background - a professor of social science. Your background?

The discipline of economics is not defined by its method. Doofus.

You know nothing about scientific progress. I could spend my time debating this, but when you challenged that theory without empirics is useless, that is the end of it. You base all your analysis on assumptions, assumptions, assumptions.

And you asked how empirical evidence can disprove a theory! Really! You are really saying these things. I hope Anderson is reading this, because at least he has some background (and in my opinion not much) in social science.

You have just made my point about how ridiculous the followers of Anderson are. No state. Great idea.

Theories are nothing more than theories unless they are tested - and then refined. That is the interaction between empirics and theory. You are talking about religion I believe, which is how most Austrians talk.

Bala said...

Oh no!! A fairly long reply was just gobbled up by blogger. That's fairly frustrating. So let me give it one more shot before I give up on this troll.

"My background - a professor of social science. Your background?"

More argument by appeal to authority. When and under what circumstances do you stop dabbling in fallacies?

"You know nothing about scientific progress."

And how the hell did you "know" what I know and what I don't? More conclusions drawn from empirical data without a theory? Brilliant.

" You base all your analysis on assumptions, assumptions, assumptions. "

You idiot. I gave you the most fundamental of all those "assumptions" - the Action Axiom. Demonstrate it to be false before you spill any more crap all over this place.

"And you asked how empirical evidence can disprove a theory!"

Oh please!! Lay it all out for us religious fanatics so that we may see the folly of our ways....

"No state. Great idea."

OK genius. Please explain why it is not a great idea. Because all empirical evidence suggests that the State is necessary for civilisation to exist?

"Theories are nothing more than theories unless they are tested - and then refined."

And empirical data is garbage unless there is a theory to make sense of that nonsense. Once again, refute the action axiom before spilling more of your puerile crap all over this board.

"You are talking about religion I believe, which is how most Austrians talk."

And you are talking crap, which is how ALL Keynesians talk.

Bala said...

And Genius,

That teeny weeny question about explaining how democracy is not 2 wolves and a sheep voting on what to have for dinner is still unanswered. Care to do that?

Anonymous said...

Sorry Genius. I missed this while retyping my reply.

"The discipline of economics is not defined by its method. Doofus."

Oh Genius! Please DEFINE Economics. I have already asked for a definition and you are busy dodging it and attributing to me statements I never made. That's a brilliant style of argumentation.

Bala

Anonymous said...

One more point, Genius. Please explain how you will use empirical data to establish causal relationships without committing the "correlation implies causation" fallacy.

Bala

Anonymous said...

"Bala said...

And Genius,

That teeny weeny question about explaining how democracy is not 2 wolves and a sheep voting on what to have for dinner is still unanswered. Care to do that?

April 18, 2011 3:21 PM"

The rest of the quote, Bala:
"Liberty is an armed sheep contesting the vote."

Anonymous said...

Economics= the study of the distribution of scarce resources. Pretty standard textbook. Your point?

I don't reply to your nonsense because it is pretty juvenile.

Correlation causation fallacy? You really think that thousands of empirical social scientists don't think of this (we call it endogeneity too). Get real. Several ways to deal with that. Never said that theory is not important - it is the bread and butter of the discipline. But I theory is only as good as its logic AND data. People thought the world was flat - they were positive until it was proven empirically that it was round.

Really, juvenile level of debate here. You are making yourself look crazy to anyone else who might be reading this.

Anonymous said...

@ professor anonymous of the social sciences

Economics is not the study of the distribution of scare resources. It is the study of how humans act within the context of scarce resources. Do you see the difference? It's an important one.

Anonymous said...

Typical. Distribution baaad! Must mean government. Government baaad!

From the dictionary -

a : a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and service

Juvenile.

Anonymous said...

@ professor social science

I didn't say anything about "distribution baaad!" or "government baad!" And I certainly didn't say what I said with your mocking and insulting tone.

The dictionary definition addresses neither my definition nor yours.

I'll ask my question again. Do you see the difference?

See if you can respond without resorting to juvenelia, professor.

Bala said...

OK Genius Social Sciences Professor,

I'll take you on on your own definition. That is good enough to show what a freaking fool you are and what juvenile drivel you are spraying on these boards.

"Economics= the study of the distribution of scarce resources. Pretty standard textbook. Your point?"

Yeah! Yeah! Coming.... I live in India and sleep at night. But still take time to tear through idiots like you. So, here it comes.

The study of "distribution" of "scarce" "resources". Now... there are clearly TWO parts to a "study" of something called "distribution".

1. How are scarce resources distributed? - This segment is NECESSARILY EMPIRICAL because the question it asks is FACTUAL. However, whatever answers it throws up says very little ABOUT (not 'for') the other part
2. Why are "scarce" resources get "distributed" the way they do? Why DO scarce resources GET distributed the way they DO? - This part of necessarily analytical. It takes as its preliminary assumptions the fundamental conditions and characteristics of the forces that drive "distribution" and deduces the "Laws" that govern the "distribution". And it so happens that the "force" that drive "distribution" is HUMAN ACTION and the primary aspect of the "condition" under which "human action" happens is that "resources" are "scarce".

The process of deduction of these laws takes as its starting point the axiom that "man acts", assumes that "resources" are "scarce" and applies REASONING (Get it? Applies freaking reasoning....) to DEDUCE the laws that govern the distribution of "scarce" "resources".

By taking as the basis of its deductive process the fundamental force that drives and directs "distribution" and taking into its assumptions the "conditions" under which this "force" operates, the process of deductive reasoning pretty much ensures that it describes the working of the real world as it exists. So much for your "theory without empirical data is useless". The reality is that the "theory" is ROOTED in the fundamental definition of the goddamned study.

So, Genius Social Sciences Professor, I've shown how the Austrian Method makes solid sense even by your "definition" of Economics. Will you now shut up and/or sit down and learn?

Anonymous said...

"Typical. Distribution baaad! Must mean government. Government baaad!"

how come im not surprised that when someone uses the word 'distribution' that you automatically think government, as if resources would not be distributed without government.

Bala said...

"You are making yourself look crazy to anyone else who might be reading this"

Oh!!! How scared I am of public disapproval!!!!!! Freaking fool. Stop trying to argue by intimidation and numbers and instead address the point I have made.

Anonymous said...

@Bala

Wow! A real loon. You accuse me of arguing from authority (yet you are the one who asked for my credentials) and arguing by intimidation, but just search through your posts and see how many times you use the words "idiot" or "fool."

I am pretty sure I made cogent arguments about the process of social science discovery, that even Anderson would have to agree with. What did you do? Claim that the "Action Axiom" supersedes all that.

As far as your specific rant, it is really quite simple - you are confusing ontology with epistemology. I would agree that the foundation of economics is rooted in understanding how human behavior impacts distribution. But I would not agree that the basis of those motives or the theories we can derive from those ontological premises are all agreed upon as axiomatic laws or tested empirically.

Is man rational? What are the specific consequences of whatever definition of rationality we are using? How do you go from methodological individualism to group behavior? Can a study of economics be devoid of political economy. Under what conditions do those assumptions about rationality actually take place - what informational and institutional contexts matter.

None of that is axiomatic territory. It is where real theory building and empirical testing takes place. THAT is the study of economics.

Again, juvenile.

Bala said...

Hey Genius Social Sciences Professor,

Please address the argument I have presented based on your definition. If you can't STFU.

And you deserve the names you get called.

And I did not ask for your credentials. You flaunted them all over the place. What a creep!

Bala said...

Hey Genius Social Sciences Professor,

"Man acts" is axiomatic. Try denying it without accepting its validity.

Bala said...

Hey GSSP,

It is clear who the loon is out here. Clearly, it is the one who thinks he can get away with refusing to address arguments by opening a new door each time. What a creep! I wonder why every Keynesian is like this. Their Keynesianism must turn their brains into jelly.

Bala said...

I asked you for a definition of Economics. You gave it. I showed you why you are talking rot. So what's left? What's your response? More gobbledygook?

Bala said...

GSSP,

You are a liar. In this post

April 18, 2011 11:58 AM

YOU started the "what's your background?" discussion. Why are all Keynesians such pathological liars?

Bala said...

GSSP,

Guess who's being 'thin-skinned' now.... ROFLMAO....

"but just search through your posts and see how many times you use the words "idiot" or "fool.""

Once again... ROFLMAO. Arguing by intimidation would be "Only a fool would not understand this point". You don't even understand the meaning of the terms you use. I hurled abuse while you argue by appeal to authority (when you flaunt your credentials), appeal to numbers (when you talk of the number of people who would find me foolish) and by intimidation (once again, when you talk of how many people would think I am a fool).

Creep to the core. True blue Keynesian pathological liar....

Anonymous said...

Stings doesn't it. Get therapy.

Anonymous said...

Lets trace this nonsense for a second.

You started to lecture me about social science methodology as if you knew something about it. Then I asked you what your background was. Then you shot back a bunch of rants and it seemed to me that you were hurling the question right back at me. So I only mentioned ONCE my background.

Then I argued from knowledge, which surprise surprise sometimes comes from spending years studying something (you should try that sometime). You accuse me of arguing from intimidation, but you have not responded to any of my responses - only called me a creep, or fool or some other intimidating name.

The foundation of our disagreement is on what constitutes the study of economics. For some reason you wanted a definition, which is fairly easy to do (btw I am not an economist).

Then you got in your head that all theory is deductive and not empirical so Hayek and the Austrians are by definition correct. I then argued that no - theory is not only deductive, but inductive and tested.

You started to make tautological arguments that since economics is the study of scarce resources and human action, then human action is the foundation of economics. Duh. That is ontological - and even that basis of economics is challenged (rationality vs. cognition and emotion). But even within the rationality paradigm - the actual study of economics is the implications of that foundational premise. That part of economics is inductive, deductive and evidence based. That is the difference between scientific knowledge and faith.

So again, there are my responses to your "arguments" without calling you names and avoiding the fact that I schooled you. If you are so confident in the Austrian school and if its deduction is so impeccable - where is the evidence that it works or is correct. Or is the world flat?

Anonymous said...

Man acts is axiomatic. Man acts is ontological - it is his state of being. The basis of that action is not axiomatic - rational, psychological, sub-conscious, social, instinct etc...


You are patting yourself on the back for stating the obvious - or did you just discover the obvious?

Bala said...

"So again, there are my responses to your "arguments" without calling you names and avoiding the fact that I schooled you. If you are so confident in the Austrian school and if its deduction is so impeccable - where is the evidence that it works or is correct."

Ah!!!! There you are. Ever heard of the Austrian Theory of the Business Cycle? Do you realise that it is the only valid, non-contradictory theory that explains the business cycle? Are you aware that it explains all the key aspects of the business cycle as have been observed in reality?

Since you are not an economist, it is unlikely that you are. However, if you are and contest my statement, please do explain how the Austrian Theory of the Business Cycle is not an explanation of REAL WORLD EVENTS AND PROCESSES.

Bala said...

"The basis of that action is not axiomatic - rational, psychological, sub-conscious, social, instinct etc... "

Since when did economics concern itself with the reasons for action? We Austrian fools keep thinking it has to do with the consequences of the fact that man acts and that the reasons fall in the realm of the behavioural sciences.

"Man acts is ontological - it is his state of being."

Please define action. You will realise the vacuity of your statement.

"You are patting yourself on the back for stating the obvious - or did you just discover the obvious?"

Neither. I am just saying that I start from the "obvious" and go on to deduce the consequences of the "obvious".

I could take you on an entire line of reasoning and explain preference, value, its ordinal nature, and so on to utility, marginal utility and a whole host of other concepts in economics, but I have no interest or time to educate you. I suggest you read "Man, Economy and State" yourself to get that education.

Further, that you call it the "obvious" means that you are not refuting it. That further means that you are implicitly admitting the validity of Austrian principles of economics but claiming that it makes no sense. Thanks for being this "gracious".

Bala said...

Since you spoke of "therapy", why don't you address this?

In your post

April 18, 2011 11:58 AM

YOU started the "what's your background?" discussion. Why do you accuse me of bringing up professional and academic qualifications? Why are all Keynesians such pathological liars?

Oh!! I forgot that you are not an economist. You cannot therefore be Keynesian. So what kind of pathological liar are you?

And if you are not an economist, what is your basis of criticising a school of economics?

Bala said...

"You started to make tautological arguments that since economics is the study of scarce resources and human action, then human action is the foundation of economics. Duh."

Actually, I should be saying "Duh!". You gave a definition of Economics as the distribution of scarce resources. I ADDED the point that the DRIVER of "distribution" is human action. Therefore, I said that the a proper study of economics has to be based on a study of the consequences of the fact that man acts. How is this tautological?

"That is ontological - and even that basis of economics is challenged (rationality vs. cognition and emotion)."

Ah!!! So you challenge the application of reason to study the consequences of human action. How?

"But even within the rationality paradigm - the actual study of economics is the implications of that foundational premise."

Implications.... Consequences... We are saying the same thing. However, I fail to understand this.

"That part of economics is inductive, deductive and evidence based."

How is it inductive or evidence-based? Do you conduct experiments in your social science laboratory? You a social engineer?

jason h said...

Here you go social scientists with physics envy. Please design an experiment that can empirically prove/disprove the Theory of Gravity.

Hint: Theory describes the physical mechanism that causes a natural phenomenon.

Can't be done? At most, empirical evidence can determine that gravitational acceleration is 9.81 m/s2, but it can say nothing about causation.

Bala said...

@jason h,

I've been trying to get him to acknowledge this, but have had no success. Thanks for the help.

jason h said...

Yes I know. This blog has been down this path before. I was trying a new approach.

It seems many confuse 'capital T' Theory with 'I have a theory(hypothesis)'.

A Theory that relies on empiricism is no Theory at all. However, one can empirically test many theories