pull down to refresh
15 sats \ 17 replies \ @Rothbardian_fanatic 9 Nov \ parent \ on: All States are Empires of Lies econ
I would have to agree. The Public Choice school was just getting started around that time. Austrian economics was never taught, since Hayek declined to refute Keynes and let that botchery stand as a “theory”. They didn’t even bother with teaching the Subjectivist Revolution economics!
I want to say it wasn't until the 80's that mainstream econ started trying to take Subjective Value Theory seriously.
Now, even macroeconomists feel the need to argue that their frameworks are "micro founded". That still won't come up until grad school though.
reply
The subjective value theory is one of the foundations of the Austrian school. They count all three subjectivists as basic Austrian founders, especially Menger. Böhm-Bawerk, Mises and Rothbard built on them.
I think the Austrians do not differentiate between macro and micro economics because they view everything as on a continuum of human action.
reply
They might make the distinction. Macro has come to be the field that contains business cycles, growth, money, and interest.
reply
They might, however, those factors come from individual human actions. The Austrians base everything in their theory on individual human actions (not just choices, but actions). They work their way up to interest rates, money, growth and business cycles from those basic premises of individual human action. They definitely do not like aggregated numbers.
reply
That's right and that's what modern macro folks also mean by "micro founded" macroeconomics. They build up from the mainstream micro theory.
There are still loads of problems with what they're doing, but it is interesting that there is now an acknowledgement that all economics needs to rest on subjective value theory.
reply
Finally, they are admitting it and moving away from labor theory. The problems are with those not using subjective value theory, since the basic premises are faulty.
Also, mathematics is not very useful to work with human action, but logic is.
Math based economics is a bit unreal and comes to nonsensensical conclusions that cause a lot of problems when applied to real economies.
Just look at the botchery of the BLS.
reply
The compounding errors of stacking various mathematical models on top of each other is one of the main issues in modern macro.
The simplifying assumptions that convert Austrian Theory into mathematical microeconomics really aren't very bad. There are a handful of rationality assumptions that still allow for a very broad realistic range of preferences. I think there's some value in making that tradeoff, because being able to use mathematical notation is really powerful.
The problem, though, is that en route to building up macro models, far more simplifying assumptions are introduced. By the end, there's little semblance of real human action remaining.
reply
That’s right. The simplifying assumptions take the rigor out of the logical thought and conclusions drawn. A lot of the simplifications are aggregations. When you aggregate data you loose all the fine grain focus of the original data. Sometimes the data become useless because it looses its acuity. This may be the problem with the BLS data and how they botch everything, then take more guesses.