Austrian Nonsense About Economic Calculation

[stockholmer]

http://socialdemocracy21stcentury.blogspot.com/2012/02/austrian-nonsense-about-economic.html

There is a tired and ridiculous tactic I notice from internet adherents of Austrian economics. Confronted with the myriad http://socialdemocracy21stcentury.blogspot.com.au/2012/01/hayeks-trade-cycle-theory-equilibrium.html problems with the Austrian business cycle theory (ABCT) http://socialdemocracy21stcentury.blogspot.com.au/2011/06/austrian-business-cycle-theory-various.html , their response is to shout the words: “you don’t understand economic calculation!”

Since the strict socialist economic calculation debate applied to communist command economies with no price system and no private ownership of capital goods, any Austrian charge of not understanding alleged “economic calculation problems” in an economy where the vast majority of all commodities are produced privately must refer to the alleged economic problems caused by the Austrian trade cycle theory.

For a non-command economy where most capital goods are privately owned, any alleged “economic calculation problems” imagined by Austrians are explained by the Austrian trade cycle theory, in works like Mises’s Human Action ((Auburn, Ala., 1998; pp. 568–583) or Hayek’s Prices and Production (London, 1931; 2nd edn., 1935), not in Mises’s Economic Calculation in the Socialist Commonwealth http://mises.org/econcalc.asp (“Die Wirtschaftsrechnung im sozialistischen Gemeinwesen,” 1920; trans. 1935). The latter is a critique of command economies (for a modern Austrian review of the socialist economic calculation debate, see Prychitko 2002).

The tactic of bandying about the concept of “economic calculation” in this way is a sign of utter ignorance, nor does it refute the problems with the Austrian trade cycle theory.


snip

[provis99]

1. you can`t win a debate with ignorant pooheads.

and Austrian economics is all about being an ignorant poohead.

[Demeter]

2. When I Consider Economists, I'm Reminded of the Tale of the 6 Blind Men and the Elephant

ELEPHANT AND THE BLIND MEN

Once upon a time, there lived six blind men in a village. One day the villagers told them, "Hey, there is an elephant in the village today."

They had no idea what an elephant is. They decided, "Even though we would not be able to see it, let us go and feel it anyway." All of them went where the elephant was. Everyone of them touched the elephant.





"Hey, the elephant is a pillar," said the first man who touched his leg.

"Oh, no! it is like a rope," said the second man who touched the tail.

"Oh, no! it is like a thick branch of a tree," said the third man who touched the trunk of the elephant.

"It is like a big hand fan" said the fourth man who touched the ear of the elephant.

"It is like a huge wall," said the fifth man who touched the belly of the elephant.

"It is like a solid pipe," Said the sixth man who touched the tusk of the elephant.

They began to argue about the elephant and everyone of them insisted that he was right. It looked like they were getting agitated. A wise man was passing by and he saw this. He stopped and asked them, "What is the matter?" They said, "We cannot agree to what the elephant is like." Each one of them told what he thought the elephant was like. The wise man calmly explained to them, "All of you are right. The reason every one of you is telling it differently because each one of you touched the different part of the elephant. So, actually the elephant has all those features what you all said."

"Oh!" everyone said. There was no more fight. They felt happy that they were all right.

The moral of the story is that there may be some truth to what someone says. Sometimes we can see that truth and sometimes not because they may have different perspective which we may not agree too. So, rather than arguing like the blind men, we should say, "Maybe you have your reasons."


http://www.jainworld.com/literature/story25.htm

This way we don’t get in arguments. In Jainism, it is explained that truth can be stated in seven different ways. So, you can see how broad (that) religion is. It teaches us to be tolerant towards others for their viewpoints. This allows us to live in harmony with the people of different thinking. This is known as the Syadvada, Anekantvad, or the theory of Manifold Predictions.

IT'S WHEN THE ECONOMISTS ARE "DOCTORING" THE ECONOMY THAT THINGS FALL APART....HUBRIS DEFEATS THEM.