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42 sats \ 26 replies \ @Rothbardian_fanatic OP 6 Aug \ parent \ on: Jeff Bezos’s Yacht: Driver of Economic Activity econ
There is also a lot of inductive reasoning going on in Austrian economic thinking! Sometimes setting the destination before doing the reasoning is a lost cause, isn’t it? That reminds me of much of the research going on by The ScienceTM.
At least for me, it’s a lot easier to work with a model in mathematical notation to derive conclusions.
You know the assumptions in the model, so you can use verbal reasoning to get to the same place but it might not be as obvious without the hint.
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I don’t know, but for some reason I just can’t bring myself to trust the mathematical models when applied to humans. I just have to add, I was once a math major, until the university started screwing with the credit system and requirements when I was nearing the end of the course, so I switched out of that major. Since I stumbled upon Mises and Rothbard, I have been an Austrian. Oh, yes, in my next major I had to take quite a bit of economics courses, too. They did not even get close to mentioning the Austrians, though.
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It's best to think of the models as tools to assist in thinking about bigger picture topics, and not specifically as predictive models of what's actually gonna happen.
My post on game theory and self custody is a good example. Although I didn't use any math, the model I presented can actually be modeled in mathematical terms. It's only meant to illustrate a particular strategic dynamic, and the factors that can variously strengthen or weaken that dynamic. It's not meant to give us a prediction about what will really happen in real life.
It's possible to conduct this reasoning in words, but much harder than if you used the assistance of diagrams, equations, etc.
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I also wonder if it would help to think of the models as being about incentives and equilibrium conditions, rather than descriptions of what individuals will necessarily do.
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Yeah I think that's a pretty fair assessment. They're more a description of what situations are strategically stable based on the incentives at play, rather than a description of what individual people actually do or how they think about it.
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I don’t think there is a human alive that would think in terms of a mathematical model before purchasing something or deciding priorities to satisfy needs and desires. OK, yes, there are certain “market players” that will use mathematical models and algorithms to buy and sell on the controlled stock markets and futures exchanges, I must admit.
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Mmm, that's true but it's also true that people do behave in a way that can be mathematically modeled. For example, when prices go down people tend to buy more of a good, which can be modeled mathematically as a demand function.
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Again, you speak of aggregates not individual people. Individual people make the aggregates. Have you found any models that work each and every time they are applied to a situation? If you are using statistics, then you can categorically state that if A then B and be correct in every case.
Yes, this may be true, but then, it is about something other than economics, isn’t it? Economics is about what people do, not what mathematical systems do. The mathematical models may point out a way to look at things is true.
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We're just talking about the reasoning process behind economic beliefs.
The only difference between deductive verbal reasoning and mathematical logic is the notation. There's nothing inherently more human or economicsy about the preferred approach of Austrians. I think they're approach has its merits, but that's not one of them.
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Perhaps there is one difference. The variables in mathematical reasoning represent only one, pure class of things, whereas verbal reasoning may have something less pure with more that one case or class as one of the bases of the reasoning.
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You might be onto something. Mathematical reasoning is not superior to verbal reasoning. The mathematical approach may be more pure and rigorous, but it also leaves out a lot of the nuances of human behavior. Mainstream economists tend to over-elevate the claims of mathematical models.
This whole discussion started because you didn't like the idea of dividing laborers into two classes.
Generally speaking, it's quite common to have heterogeneous goods in models.
Unfortunately, mathematical models cannot represent human action. There are no proper variables that fit the situation. The reasoning is about something other than human action and catallactics, IMHO.
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