33 sats \ 8 replies \ @Rothbardian_fanatic 13 Nov \ parent \ on: Wanted: Critics of Austrian Economics econ
The reason why Austrians do not engage in terms of mathematics is because they base their economics on a different concept: logic.
Austrian economics is a chain of reasoning that starts from: humans act.
They draw all conclusions from this basic premise and use no mathematics to prove anything although they sometimes use mathematics on problems involving margins and actions on the margins.
Mainstream economists do not want to engage Austrians on the basis of logic is why they don’t do it.
The conclusions of the Austrian school, including Murray Rothbard, even make sense, common sense when explained step-by-logical-step. They don’t often come to conclusions that are nonsensical on the face of them.
Mathematics is just logic, though, and it provides many useful analytical tools.
I believe Austrians were right to reject the use of certain mathematics that are inappropriate for the study of human action, but they are overly broad in their condemnation of mathematics.
Some Austrians, like Bob Murphy, are more discerning and recognize that many of the tools in set theory and discrete mathematics are applicable to economics.
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Austrian econ is more like discrete math. It's interested in what happens at the margin of whatever it is that is being analyzed. In particular it's interested in:
- Border cases
- Qualities rather than quantities
- Relative comparisons rather than absolute values
- Partial orders (e.g. those formed by "if x then y" relations)
- Directionality (↑/↓) or sign (+/-) rather then rate of change
- Finite domains rather than functions over continuous sets
- Asymptoticity of recursive functions (which game theory is a study of)
The human element introduces non-determinism.
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Exactly.
My view is that embracing the branches of mathematics that map onto their methods of analysis would benefit them, by immediately integrating a bunch of known results from those fields, and would make it easier for mainstream academics to embrace their work.
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The empirical methods of mainstream econ work with data, once data has been collected.
The a priori methods of Austrians have the benefit that they're suitable for analyzing new phenomena, such as Bitcoin, before there is data on it. Satoshi had to use Austrian, a priori thinking, to create it.
But now we have 16 years of data too, and I think it's easier to spike most people's interest by showing them the data in the form of an NGU chart, than it is by getting them to read the white paper and understand the game theory :)
Which is an example of how empiricism can be useful.
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Yes, Austrians acknowledge the usefulness of empiricism for doing economic history and demonstrating how economic principles played out in the past.
I think they do themselves a disservice in seeming to oppose the use of empirics at all, when what they oppose is the use of empirics for proving theory.
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It may benefit them, however, that is not the way Austrians have pursued their theories from Menger to the present. It is outside of their methods of theoretical exploration.
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Ok I can agree with you on that point! The other point not mentioned is that mainstream economists are using mathematical tools inappropriately to arrive at inappropriate conclusions. Their conclusions depend upon the mythical homo economicus, which last I looked did not really exist.
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Now we're fully aligned.
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