mercoledì 22 febbraio 2017

Why I Am Not an Austrian Economist Bryan Caplan

Notebook per
Why I Am Not an Austrian Economist
Bryan Caplan
Citation (APA): Caplan, B. (2014). Why I Am Not an Austrian Economist [Kindle Android version]. Retrieved from

Parte introduttiva
Evidenzia (giallo) - Posizione 1
Why I Am Not an Austrian Economist by Bryan Caplan
Nota - Posizione 3
+ che economia sembra meta-economia (filosofia storia economica) x "austriaco" si intende mises+rothbard
Evidenzia (giallo) - Posizione 9
do not deny that Austrian economists have made valuable contributions
Evidenzia (giallo) - Posizione 14
while self-labeled Austrian economists have some valid contributions
Evidenzia (giallo) - Posizione 16
abundance of meta-economics (philosophy, methodology, and history of thought), but few substantive results.
Evidenzia (giallo) - Posizione 20
1. Austrian Economics, what
Nota - Posizione 20
Evidenzia (giallo) - Posizione 21
I use the term to refer to the economics of Ludwig von Mises, Murray Rothbard,
Evidenzia (giallo) - Posizione 26
Mises and Rothbard rather than F.A. Hayek
Evidenzia (giallo) - Posizione 27
Mises and Rothbard clearly rejected many of the key elements of modern neoclassical
Evidenzia (giallo) - Posizione 28
If Mises and Rothbard are right, then modern neoclassical economics is wrong; but if Hayek is right, then mainstream economics merely needs to adjust its focus.[2]
Nota - Posizione 29
Evidenzia (giallo) - Posizione 30
Hayek turned almost entirely to philosophy, law, and intellectual history after the 1930's.
Nota - Posizione 32
1 accusa di roth ai neo: le utilità cardinalizzano le preferenze falso! 2 accusa: il concetto d indifferenza nn esiste poichè l azione nn può rivelarlo. risposta: l assunto x cui non esiste ciò che nn è rilevato è assurdo. me lo dice l introspezione 3 critica: non esiste continuità nelle preferenze risposta: ma gli austriaci stessi la usano postulando l incontro di domanda e offerta. la con è un utile finzione dimostrare il contrario è a carico di roth welfare x roth: il libero mercato avvantaggia tutti lo statalismo avvantaggia tizio a spese di caio critica a roth: nn offre una buona difesa del mercato poichè lascia aprrta la possibilità che l intervento govrrnativo sia benefico. se le utilità nn sono cfrtabili l agnosticismo è l unica posizione sensata critica al comportamentismo radicale di roth: se roth fose coerente nemmeno la firma sul contrato indica la volontà di concluderlo ma solo quella di firmarlo
Evidenzia (giallo) - Posizione 32
2. Foundations of Microeconomics
Nota - Posizione 32
Evidenzia (giallo) - Posizione 36
2.1. Utility Functions vs. Value Scales
Nota - Posizione 36
Evidenzia (giallo) - Posizione 37
neoclassical economists habitually use "utility functions" to describe individuals' preferences.
Evidenzia (giallo) - Posizione 38
Rothbard instead preferred to discuss the "value scales" of individuals.
Evidenzia (giallo) - Posizione 40
for neoclassicals, an individual selects the highest feasible value of U,
Evidenzia (giallo) - Posizione 41
Both approaches seem quite similar;
Evidenzia (giallo) - Posizione 42
Rothbard noted some underlying differences,
Evidenzia (giallo) - Posizione 43
According to Rothbard, the mainstream approach credulously accepted the use of cardinal utility,
Evidenzia (giallo) - Posizione 54
The utility function approach is based as squarely on ordinal utility as Rothbard's is.
Nota - Posizione 54
Evidenzia (giallo) - Posizione 64
A utility function just uses numbers to summarize ordinal rankings; it doesn't commit us to belief in cardinal utility.
Evidenzia (giallo) - Posizione 74
To sum up, Rothbard falsely accused neoclassical
Evidenzia (giallo) - Posizione 78
2.2. Indifference
Nota - Posizione 78
Evidenzia (giallo) - Posizione 81
But what if U( a)=U( b); i.e., what if an agent is indifferent between two alternatives? Rothbard elaborated upon Mises by rejecting the very possibility as incoherent
Evidenzia (giallo) - Posizione 83
it is impossible for action to demonstrate indifference. Action demonstrates preference, not indifference.
Evidenzia (giallo) - Posizione 85
indifference cannot be a basis for action.
Evidenzia (giallo) - Posizione 87
no preference can exist which cannot be revealed in action.
Nota - Posizione 87
Evidenzia (giallo) - Posizione 96
For example, my preference for ice cream yesterday can no longer be revealed, since I had no ice cream yesterday
Evidenzia (giallo) - Posizione 97
I have introspective knowledge of my ice cream preferences from yesterday.
Evidenzia (giallo) - Posizione 100
I am often indifferent between the colors of clothes; though I pick one color,
Evidenzia (giallo) - Posizione 101
The behaviorist might deny the reality of my mental states,
Nota - Posizione 101
Evidenzia (giallo) - Posizione 105
2.3. Continuity
Nota - Posizione 105
Evidenzia (giallo) - Posizione 107
The human being cannot see the infinitely small step;
Evidenzia (giallo) - Posizione 109
you can't differentiate a function that isn't continuous.
Evidenzia (giallo) - Posizione 110
One obvious problem arises here. Without continuous preferences, it is also highly unlikely that e.g. supply and demand can ever be equal.
Evidenzia (giallo) - Posizione 113
rejection of continuity also argues against even the use of simple algebraic constructs
Evidenzia (giallo) - Posizione 114
one could say that the unrealism of continuity is only minor.
Evidenzia (giallo) - Posizione 115
"Most writers on economics consider this assumption a harmless, but potentially very useful, fiction, and point to its great success in the field of physics... The crucial difference is that physics deals with inanimate objects that move but do not act."[19]
Nota - Posizione 117
Evidenzia (giallo) - Posizione 122
2.4. Welfare Economics
Nota - Posizione 122
Evidenzia (giallo) - Posizione 132
Rothbard could only claim the welfare effects of government intervention upon "social utility" are indeterminate; i.e., since the victim loses and the intervener gains, it is impossible to say anything about social utility without making a verboten interpersonal welfare comparison.
Nota - Posizione 134
Evidenzia (giallo) - Posizione 135
Rothbard's welfare economics provides a much weaker defense of the free market than usually assumed.
Evidenzia (giallo) - Posizione 137
Rothbard also implicitly denies the ability to reject state action in the name of efficiency.
Evidenzia (giallo) - Posizione 139
Rothbard's welfare criterion justifies agnosticism about - not denial of - the benefits of statism.
Evidenzia (giallo) - Posizione 140
flaw which again flows from his behaviorist insistence that only preferences demonstrated in action are real.
Evidenzia (giallo) - Posizione 146
When two people sign a contract, do they actually demonstrate their preference for the terms of the contract? Perhaps they merely demonstrate their preference for signing their name
Nota - Posizione 147
Evidenzia (giallo) - Posizione 149
Rothbard's refusal to acknowledge unobserved preferences would have to impress even B.F. Skinner.
Evidenzia (giallo) - Posizione 150
At every moment, by introspection we are aware of preferences unrevealed by our behavior.
Evidenzia (giallo) - Posizione 151
Figuring out the mental states of other people is obviously more difficult, but that hardly shows that their mental states do not exist.
Evidenzia (giallo) - Posizione 154
Thus, Rothbard's welfare economics terminates in agnosticism
Evidenzia (giallo) - Posizione 160
2.5. Subjectivism
Nota - Posizione 161
Evidenzia (giallo) - Posizione 161
the impression that other economists fail to embrace subjectivism - an impression that is simply false.
Evidenzia (giallo) - Posizione 168
3. Applied Topics
Nota - Posizione 169
Evidenzia (giallo) - Posizione 173
3.1. Economic Calculation and the "Impossibility" of Socialism
Nota - Posizione 173
Evidenzia (giallo) - Posizione 174
Mises considered the "socialist calculation argument" to be a decisive objection
Evidenzia (giallo) - Posizione 174
There are other valid arguments against socialism;
Evidenzia (giallo) - Posizione 176
productivity of labor is incomparable higher than under socialism."[25]
Nota - Posizione 176
Evidenzia (giallo) - Posizione 180
Socialism is not a realizable system of society's economic organization because it lacks any method of economic calculation...
Nota - Posizione 181
Evidenzia (giallo) - Posizione 182
This conclusion is amazing, for Mises repeatedly insists that economic theory gives only qualitative, not quantitative laws?
Evidenzia (giallo) - Posizione 188
If so, then how could he possibly know by economic theory alone that the negative effect of the lack of economic calculation would be severe enough to make socialism infeasible?
Nota - Posizione 189
Evidenzia (giallo) - Posizione 198
Does Crusoe's one-man socialism become "impossible" when Friday shows up? Hardly. What if 100 people show up? 1000? Mises'
Evidenzia (giallo) - Posizione 203
Austrians have overused the economic calculation argument.
Evidenzia (giallo) - Posizione 203
absence of detailed empirical evidence
Evidenzia (giallo) - Posizione 204
it is just another argument out of hundreds
Evidenzia (giallo) - Posizione 205
problem of work effort, or innovation, or the underground economy,
Nota - Posizione 205
Evidenzia (giallo) - Posizione 207
current events do nothing to show that economic calculation was the insuperable difficulty of socialist economies.
Evidenzia (giallo) - Posizione 210
3.2. Monopoly Theory
Nota - Posizione 210
Evidenzia (giallo) - Posizione 211
Mises conceded the theoretical possibility of free-market monopoly
Evidenzia (giallo) - Posizione 215
there is always some degree of monopolistic distortion
Nota - Posizione 215
Evidenzia (giallo) - Posizione 216
In the absence of perfect price discrimination,
Evidenzia (giallo) - Posizione 217
there is a "deadweight loss" -
Evidenzia (giallo) - Posizione 223
one of Rothbard's greatest achievements as an economist was to point out the innumerable ways that government creates monopoly.[33]
Evidenzia (giallo) - Posizione 224
right to explain why market monopoly is so difficult to maintain.
Evidenzia (giallo) - Posizione 228
in 1962 he was still far ahead of his time.
Evidenzia (giallo) - Posizione 228
theory of perfect competition was indeed grossly abused by economists
Evidenzia (giallo) - Posizione 230
Since Rothbard wrote Man, Economy, and State, however, the better neoclassical theorists have wised up.
Evidenzia (giallo) - Posizione 231
Some economists have elaborated upon Schumpeter's observation that perfectly competitive firms have little incentive to innovate.
Evidenzia (giallo) - Posizione 236
3.3. Public Goods
Nota - Posizione 236
Evidenzia (giallo) - Posizione 237
is a logical application of his unusual utility theory:
Evidenzia (giallo) - Posizione 237
they are being forced by the State
Evidenzia (giallo) - Posizione 238
A standard reply is that the recipients "could not" have obtained the benefit even if they wanted to buy it voluntarily.
Nota - Posizione 239
Evidenzia (giallo) - Posizione 243
contra Rothbard preferences can exist without being acted upon.
Evidenzia (giallo) - Posizione 245
just because some people misuse an economic theory does not invalidate it.
Nota - Posizione 245
Evidenzia (giallo) - Posizione 246
Ronald Coase provides most of the answer.
Evidenzia (giallo) - Posizione 249
a vast public choice literature
Evidenzia (giallo) - Posizione 253
No more successful is Rothbard's effort to accept half of the theory of externalities:
Evidenzia (giallo) - Posizione 263
it makes no sense for Rothbard to accept negative externalities
Evidenzia (giallo) - Posizione 265
While Rothbard deserves praise for analyzing the extent to which private property can solve externalities problems, his reformulation of the theory of externalities is decidedly unsuccessful.
Nota - Posizione 266
Evidenzia (giallo) - Posizione 266
3.4. The Austrian Theory of the Business Cycle
Nota - Posizione 266
Evidenzia (giallo) - Posizione 267
distinguish the correct and almost universally accepted aspects of the Austrian theory of the business cycle (henceforth ABC) from its incorrect
Evidenzia (giallo) - Posizione 269
3.4.1. The Correct and Widely Accepted Aspects of the ABC
Nota - Posizione 269
Evidenzia (giallo) - Posizione 271
Proposition 1:
Evidenzia (giallo) - Posizione 271
unemployment is caused by excessive real wages.
Evidenzia (giallo) - Posizione 272
Proposition 2:
Evidenzia (giallo) - Posizione 272
Using inflation to reduce real wages
Nota - Posizione 272
Evidenzia (giallo) - Posizione 273
is at best unreliable,
Nota - Posizione 273
Evidenzia (giallo) - Posizione 275
rigid downward."[38]
Evidenzia (giallo) - Posizione 278
Robert Lucas' work along these lines were one of the main reasons he recently received a Nobel prize.
Evidenzia (giallo) - Posizione 279
view of unemployment now prevails among academic economists.[39]
Evidenzia (giallo) - Posizione 282
Mises and Rothbard's over-simplified view of the cause of downwardly
Evidenzia (giallo) - Posizione 283
Rothbard: "Unemployment is caused by unions
Evidenzia (giallo) - Posizione 284
Rothbard's insight does much to explain unemployment in e.g. modern Europe,
Evidenzia (giallo) - Posizione 286
Occasionally, however, the wage rates are maintained by voluntary choice
Evidenzia (giallo) - Posizione 290
Rothbard like Mises concentrates exclusively on government and unions,
Evidenzia (giallo) - Posizione 292
employers might refrain from cutting wages to avoid damage to morale
Nota - Posizione 293
Evidenzia (giallo) - Posizione 294
it takes time to bargain, and risks the loss of mutual good
Evidenzia (giallo) - Posizione 295
actively coerce new hires, threatened "insiders" might informally haze, mistreat, or otherwise fail to cooperate newly-hired "outsiders."
Evidenzia (giallo) - Posizione 296
Put yourself in the shoes of the owner of a business.
Evidenzia (giallo) - Posizione 305
3.4.2. The Incorrect and Controversial Aspects of the ABC
Nota - Posizione 306
Evidenzia (giallo) - Posizione 307
Proposition 3: Monetary expansion distorts the structure of production
Evidenzia (giallo) - Posizione 308
Proposition 4: The ABC explains the "sudden general cluster of business errors."
Evidenzia (giallo) - Posizione 311
expansionary monetary policy tends to reduce interest rates (definitely real interest rates,
Evidenzia (giallo) - Posizione 316
the tendency of lower interest rates to stimulate more round-about projects.
Evidenzia (giallo) - Posizione 320
What I deny is that the artificially stimulated investments have any tendency to become mal investments.
Evidenzia (giallo) - Posizione 322
The objection is simple: Given that interest rates are artificially and unsustainably low, why would any businessman make his profitability calculations based on the assumption that the low interest rates will prevail indefinitely?
Nota - Posizione 324
Evidenzia (giallo) - Posizione 324
entrepreneurs would realize that interest rates are only temporarily low, and take this into account.
Evidenzia (giallo) - Posizione 325
Austrians are assuming that entrepreneurs have strange irrational expectations.
Evidenzia (giallo) - Posizione 332
Why does Rothbard think businessmen are so incompetent
Evidenzia (giallo) - Posizione 342
Garrison, attempt to handle the expectational objection.
Evidenzia (giallo) - Posizione 343
"[M]acroeconomic irrationality does not imply individual irrationality. An individual can rationally choose to initiate or perpetuate a chain letter... Similarly, it is possible for the individual to profit by his participation in a market process that is - and is known by that individual to be - an ill-fated process."[50]
Nota - Posizione 345
Evidenzia (giallo) - Posizione 345
This is definitely a possible scenario. But does it make sense in this particular case? It does not.
Evidenzia (giallo) - Posizione 350
why don't the consumption goods industries enjoy a huge boom during depressions?
Nota - Posizione 351
Evidenzia (giallo) - Posizione 361
A final supposed merit of the ABC is that it explains why capital goods industries suffer more
Evidenzia (giallo) - Posizione 364
durable good purchase, whether durable capital goods or durable consumer goods, is going to be much more sensitive to changes in income
Nota - Posizione 365
Evidenzia (giallo) - Posizione 370
Another interesting argument made in favor of the Austrian theory is that it is the only theory capable of explaining stagflation
Nota - Posizione 371
Evidenzia (giallo) - Posizione 372
there were numerous theoretically rigorous explanations of stagflation,
Evidenzia (giallo) - Posizione 374
a. Natural resource shocks, e.g. oil
Evidenzia (giallo) - Posizione 375
b. The rational-expectations explanation:
Evidenzia (giallo) - Posizione 376
Lucas won the last Nobel prize for his work on this idea.
Evidenzia (giallo) - Posizione 377
c. Technology shocks
Evidenzia (giallo) - Posizione 378
real business cycle theory,
Evidenzia (giallo) - Posizione 384
Austrians were entirely correct to decry the dinosaur Keynesians'
Evidenzia (giallo) - Posizione 387
4. Method, Math, and 'Metrics
Nota - Posizione 388
Evidenzia (giallo) - Posizione 388
4.1. The Theory and Practice of Economic Theory
Nota - Posizione 388
Evidenzia (giallo) - Posizione 390
Mises and Rothbard both emphasize the primacy of economic theory over economic history;
Evidenzia (giallo) - Posizione 391
necessary truth of the "axiom of action,"
Evidenzia (giallo) - Posizione 395
near-total isolation from empirical work;
Evidenzia (giallo) - Posizione 400
4.2. Is Theory Enough?
Nota - Posizione 400
Evidenzia (giallo) - Posizione 400
Armchair economic theorizing
Evidenzia (giallo) - Posizione 402
Mises and Rothbard however err when they say that economic history can only illustrate economic theory.
Evidenzia (giallo) - Posizione 403
empirical evidence is often necessary to determine whether a theoretical factor is quantitatively significant.
Evidenzia (giallo) - Posizione 404
Price theory shows us that a minimum wage in excess of the market-clearing price will increase unemployment. However, as Mises and Rothbard emphasize, economic theory tells us nothing about how big the increase in unemployment will be.
Nota - Posizione 405
Evidenzia (giallo) - Posizione 407
until you study some economic history your knowledge is of a meagre and unsatisfactory kind.
Evidenzia (giallo) - Posizione 415
4.3. Mathematics, Econometrics, and the Progress of Economics
Nota - Posizione 415
Evidenzia (giallo) - Posizione 416
prevents Austrian economists from getting more publications in mainstream journals
Evidenzia (giallo) - Posizione 416
their papers rarely use mathematics or econometrics,
Evidenzia (giallo) - Posizione 418
Austrians reject econometrics on principle because economic theory is true a priori,
Evidenzia (giallo) - Posizione 424
The science of economics has made progress, but how much of it is due to the use of M&E?
Evidenzia (giallo) - Posizione 425
Here are a few of the best new ideas to come out of academic economics since 1949: 1. Human capital theory 2. Rational expectations macroeconomics 3. The random walk view of financial markets 4. Signaling models 5. Public choice theory 6. Natural rate models of unemployment 7. Time consistency 8. The Prisoners' Dilemma, coordination games, and hawk-dove games 9. The Ricardian equivalence argument for debt-neutrality 10.Contestable markets
Nota - Posizione 430
Evidenzia (giallo) - Posizione 430
mathematics was the main language used to present these ideas
Evidenzia (giallo) - Posizione 430
was math instrumental in the discovery of these ideas?
Evidenzia (giallo) - Posizione 432
maybe Idea #2, and possibly #3.
Nota - Posizione 433
Evidenzia (giallo) - Posizione 433
Even there, intuition, not math, probably played the leading role.[57]
Evidenzia (giallo) - Posizione 434
econometrics has "crowded out" traditional qualitative economic history.
Evidenzia (giallo) - Posizione 436
When simple econometrics failed to yield universal agreement among informed economists,
Evidenzia (giallo) - Posizione 438
looking for car keys underneath the streetlight because it is brighter there.
Evidenzia (giallo) - Posizione 439
causation and correlation are different,
Evidenzia (giallo) - Posizione 440
Better experimental design - including the method of "natural experiments"
Nota - Posizione 440
Evidenzia (giallo) - Posizione 441
My own view is the econometrics is not useless, but must become a subordinate tool of the economic historian rather than vice versa. Friedman and Schwartz's A Monetary History of the United States is close to the optimal mix - careful historical analysis supplemented with econometrics, rather than vice versa.[58]
Nota - Posizione 443
Evidenzia (giallo) - Posizione 444
empirical evidence on their contribution is decidedly negative.
Nota - Posizione 444
Evidenzia (giallo) - Posizione 446
extreme isolation
Nota - Posizione 446