Is the Austrian School of Economics Pseudoscience?

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carnap
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Re: Is the Austrian School of Economics Pseudoscience?

Post by carnap » Sun May 13, 2018 4:44 pm

mkm wrote:
Sun May 13, 2018 7:37 am
After WW2 for a couple of decades there was a balance between West and Communists, again you are factually wrong.
Factually wrong about what? I'm not sure what you mean by "balance" but capitalist nations by far had more power after WW2. The US was in particular in a special position because unlike many other world powers its economy and infrastructure was not damaged by the war.

Any perceived "balance" between the west and communists was due to the strategic development of nuclear weapons and missile technology by the USSR and China. This prevent the west from pursuing military action against communist states....a fact that hasn't been lost on nations like North Korea and Iran.
mkm wrote:
Sun May 13, 2018 7:37 am
It's not capitalist narrative, it's the laws of the economy and historical facts.
There are no "laws of the economy" (just economic models none of which are very good at predicting economic events) and the narrative is very clearly rooted in free-market theory which is the basis of capitalist nations. So I stand by what I said, its a capitalist narrative of why communism doesn't work.

Communism and capitalism represent different economic theories, as such to judge one within the system of the other is a disingenuous way to analyze them. Ultimately you have to compare the theories philosophically, economic theory as taught in western universities hinges on a variety of philosophic assumptions. There are a variety of questions to address here, for example: http://www-personal.umd.umich.edu/~deli ... nomics.htm

Communism vs Capitalism can be seen as the result different answers to some the key foundational issues.
mkm wrote:
Sun May 13, 2018 7:37 am
It's not only interpretation, you dismiss facts.
You keep making these sorts of vague accusations why demonstrating nothing. Could you please clarify what you think I'm dismissing or wrong about and then state why you believe that to be the case? Otherwise its just meaningless mud-slinging.
mkm wrote:
Sun May 13, 2018 7:37 am
It has been quite succesful after it allowed Western corporations to get in and became a cheap producer of all sorts of things for the rest of the world.
This seems to be a rather western centric interpretation. China greatly restricts western corporations within China and China has become a manufacturing power-house not because western corporations but because their own innovations. But China did create a sort of hybrid economic model, that is, they created special economic zones were businesses were able to operate more independently but even within these economic zones important aspects of business like financing are still very much controlled by the state. But the economic zones were planned and the overall economy is still very much a planned economy.

In this sense you could interpret China as a nation that has developed a realistic interpretation of communism in a global order dominated by capitalist powers. That is to say, unlike the USSR China realized that it could exploit western powers to bootstrap its economy.

mkm wrote:
Sun May 13, 2018 7:37 am
Of course, because death of tens of millions doesn't matter if there are hundreds of millions more. You dodge that one because you know that there is no single case of a capitalist country that starved millions of its people to death.
You're focusing on dramatics rather than addressing the key questions. As I said before, your underlying reasoning here makes little sense. The idea that some form of government is inherently flawed because some particular regime pursued a misguided policy makes little sense.

Also, as I noted previously, if you're going to judge actions by outcomes like this you'd want to do it relative to population size. If you look at raw numbers the nations with the largest populations will always look like they have the worst government policies.
mkm wrote:
Sun May 13, 2018 7:37 am
The war they started, so who is to blame?
How the war started is irrelevant to the economic details being discussed. But I think your comments about the origins of the war are entirely glib, as if North Korea just invaded the South one day. The Korea war is was related to the cold war and various power struggles in the region, Korea was arbitrary divided and the war was the result of that division. Blaming North Korea for the war makes little sense, there were numerous factors to the war and you cannot single out one as the ultimate "cause" of the war.
mkm wrote:
Sun May 13, 2018 7:37 am
They do, it's truism. If A doesn't trade with B, then B doesn't trade with A. It's symmetric relation.
You're ignoring the key issue, the sanctions just don't impact trade between North Korea and the US but instead seek to bully any large corporation in the world from doing business with North Korea. You're speaking as if the relationship is symmetrical but that is obviously not the case, the sanctions dramatically limit North Korea's ability to develop by limiting its access to key natural resources, technology, etc while having almost no impact on current powers.
mkm wrote:
Sun May 13, 2018 7:37 am
3% is the figure from the avaiable data, and you are again factually wrong or lying.
Once again you accuse me of lying yet provide zero evidence that I'm wrong. But I just realized the issue here. Much of your commentary here has been rather vague so I wasn't sure what you had in mind with the 3%. Of course I made that known but you apparently thought it was better to call me names rather than clarify what you had in mind. In any case, I was rather clear about what figure I was citing and its the share of the federal budget (spending minus social security) that goes to the military. That is approximately 55%. What you seem to be citing is the fraction of US GDP that comes from active military spending which is around 3.4%. But that isn't even the right figure, you'd also have to include non-defense military spending as well which is another 3% (this includes veteran benefits, etc). So the total is around 6.7% of GDP and around 55% of the federal budget.

https://en.wikipedia.org/wiki/United_St ... c_2016.png


mkm wrote:
Sun May 13, 2018 7:37 am
You can measure whether people are rich, how educated they are, and so on, but it's hard to measure happiness.
I agree that its hard to measure happiness but how does that make it a nonsensical issue? I think the vast majority would agree that ultimately what matters is human happiness not the size of our houses, the amount of crap we put in them, etc.

But modern capitalist make little effort to try to measure and achieve human happiness, its all about crude economic measures that at best have a loose relationship to the well-being of people.
mkm wrote:
Sun May 13, 2018 7:37 am
I just value data over various bon mots.
Honestly....what exactly does this mean? You value data? Data is just a collection of figures, its how you interpret the data that matters and how you interpret that data hinges entirely on your theorizing and assumptions.

mkm
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Post by mkm » Mon May 14, 2018 7:35 am

carnap wrote:
Sun May 13, 2018 4:44 pm
Factually wrong about what? I'm not sure what you mean by "balance" but capitalist nations by far had more power after WW2. The US was in particular in a special position because unlike many other world powers its economy and infrastructure was not damaged by the war.

Any perceived "balance" between the west and communists was due to the strategic development of nuclear weapons and missile technology by the USSR and China. This prevent the west from pursuing military action against communist states....a fact that hasn't been lost on nations like North Korea and Iran.
Development that occured 4 years after the end of the war (later for China). If the West wanted to destroy communistic countries, it had much better opportunity in that very time-frame, than later. Such a behaviour doesn't make sense in your narrative. If there was no balance and the West wanted to destroy communistic countries, why peace?
carnap wrote:
Sun May 13, 2018 4:44 pm
There are no "laws of the economy" (just economic models none of which are very good at predicting economic events)
If there are no laws of the economy, then what these models model, and why some models are better than the others? Even if they don't exists, we may as well call "laws" these things we model and we are getting better at this.
carnap wrote:
Sun May 13, 2018 4:44 pm
and the narrative is very clearly rooted in free-market theory which is the basis of capitalist nations. So I stand by what I said, its a capitalist narrative of why communism doesn't work.
Again, it's not narrative, these are facts. If comunnism negates the existence of laws of the economy, then it's not surprising that it's so economically inefficient.
carnap wrote:
Sun May 13, 2018 4:44 pm
Communism and capitalism represent different economic theories, as such to judge one within the system of the other is a disingenuous way to analyze them.
What these theories describe, if there are no laws of the economy?
You call it disingenuous, because one clearly works, and the other doesn't. If you have a theory of economy, that doesn't work, if some unrealistic
requirements are not met, then the theory sucks.
carnap wrote:
Sun May 13, 2018 4:44 pm
Ultimately you have to compare the theories philosophically, economic theory as taught in western universities hinges on a variety of philosophic assumptions. There are a variety of questions to address here, for example: http://www-personal.umd.umich.edu/~deli ... nomics.htm

Communism vs Capitalism can be seen as the result different answers to some the key foundational issues.
Each sensible theory should succesfully confront the reality, they are not just thought constructs without grounding in the reality.
carnap wrote:
Sun May 13, 2018 4:44 pm
You keep making these sorts of vague accusations why demonstrating nothing. Could you please clarify what you think I'm dismissing or wrong about and then state why you believe that to be the case? Otherwise its just meaningless mud-slinging.
I do this everytime you say something less vague than "capitalist conspiracy to discredit communism".
carnap wrote:
Sun May 13, 2018 4:44 pm
This seems to be a rather western centric interpretation. China greatly restricts western corporations within China
The point is that China began it's exodus from poverty by allowing just a little bit of capitalism. Why they had to, id communism is so great on its own?
carnap wrote:
Sun May 13, 2018 4:44 pm
China has become a manufacturing power-house not because western corporations but because their own innovations.
Then why China wasn't a manufacturing power-house before it allowed West to come in? It doesn't make sense.
carnap wrote:
Sun May 13, 2018 4:44 pm
But China did create a sort of hybrid economic model, that is, they created special economic zones were businesses were able to operate more independently but even within these economic zones important aspects of business like financing are still very much controlled by the state. But the economic zones were planned and the overall economy is still very much a planned economy.
It's planned, besides the areas, where it's not. And without these deviations from communism China would still sink in poverty.
carnap wrote:
Sun May 13, 2018 4:44 pm
In this sense you could interpret China as a nation that has developed a realistic interpretation of communism in a global order dominated by capitalist powers. That is to say, unlike the USSR China realized that it could exploit western powers to bootstrap its economy.
You are just proving the point, that it's a little bit of capitalism, that is responsible for China's success, and yet you still try to frame it in your narration. You take facts and subvert them.
carnap wrote:
Sun May 13, 2018 4:44 pm
You're focusing on dramatics rather than addressing the key questions. As I said before, your underlying reasoning here makes little sense. The idea that some form of government is inherently flawed because some particular regime pursued a misguided policy makes little sense.
I just don't entertain your silly idea that you can't judge a particular form of government by fruits brought by regimes following it. In theory maybe communism makes people rich and happy, but so far it makes people starvde and poor.
carnap wrote:
Sun May 13, 2018 4:44 pm
Also, as I noted previously, if you're going to judge actions by outcomes like this you'd want to do it relative to population size. If you look at raw numbers the nations with the largest populations will always look like they have the worst government policies.
Ok then, show me similar example of a reform in a capitalistic country that made 5% of its population starve to death. I'll wait.
carnap wrote:
Sun May 13, 2018 4:44 pm
How the war started is irrelevant to the economic details being discussed.
You think that tendency to war are irrelevant to judge forms of government?
carnap wrote:
Sun May 13, 2018 4:44 pm
But I think your comments about the origins of the war are entirely glib, as if North Korea just invaded the South one day. The Korea war is was related to the cold war and various power struggles in the region, Korea was arbitrary divided and the war was the result of that division. Blaming North Korea for the war makes little sense, there were numerous factors to the war and you cannot single out one as the ultimate "cause" of the war.
You may say the same thing for many other countries, but for some reason the only countries that are so stuck in proverty, are these that mimic communism the closest. You find new excuses, but none of them was decisive in other cases, so they are irrelevant. Many European countries were destroyed by war to higher degree, and yet they are much further, than NK.
carnap wrote:
Sun May 13, 2018 4:44 pm
You're ignoring the key issue, the sanctions just don't impact trade between North Korea and the US but instead seek to bully any large corporation in the world from doing business with North Korea. You're speaking as if the relationship is symmetrical but that is obviously not the case, the sanctions dramatically limit North Korea's ability to develop by limiting its access to key natural resources, technology, etc while having almost no impact on current powers.
It's the NK that isolated itself from the rest of the world. You are pretending that NK is a peaceful country and someone for no reasons at all drew a target on its back. Maybe if it wasn't threatening with nuclear strikes, or ceased putting its own people to slave camps, sanctions would be lifted.
carnap wrote:
Sun May 13, 2018 4:44 pm
Once again you accuse me of lying yet provide zero evidence that I'm wrong. But I just realized the issue here. Much of your commentary here has been rather vague so I wasn't sure what you had in mind with the 3%. Of course I made that known but you apparently thought it was better to call me names rather than clarify what you had in mind. In any case, I was rather clear about what figure I was citing and its the share of the federal budget (spending minus social security) that goes to the military. That is approximately 55%. What you seem to be citing is the fraction of US GDP that comes from active military spending which is around 3.4%. But that isn't even the right figure, you'd also have to include non-defense military spending as well which is another 3% (this includes veteran benefits, etc). So the total is around 6.7% of GDP and around 55% of the federal budget.

https://en.wikipedia.org/wiki/United_St ... c_2016.png
My mistake, 3% in relation to GDP. It doesn't change the fact that your statement is still missleading, since it's you, who compared military spendings to GDP. If governements had no other spendings but military, it would be 100%, so it's irrelevant figure, you want to check if it's cumbersome for the citizens, and % of GDP is much better figure.
carnap wrote:
Sun May 13, 2018 4:44 pm
I agree that its hard to measure happiness but how does that make it a nonsensical issue? I think the vast majority would agree that ultimately what matters is human happiness not the size of our houses, the amount of crap we put in them, etc.
Because it's too easy to abuse. I'm pretty sure that North Koreans would say that they are happy if asked, but I don't think we should act based on that knowledge.
carnap wrote:
Sun May 13, 2018 4:44 pm
But modern capitalist make little effort to try to measure and achieve human happiness, its all about crude economic measures that at best have a loose relationship to the well-being of people.
It's simple, since if ceteris paribus, it's better to be rich than poor. And communists know that very well, since usually what the want from capitalists is money and means to make them.
carnap wrote:
Sun May 13, 2018 4:44 pm
Honestly....what exactly does this mean? You value data? Data is just a collection of figures, its how you interpret the data that matters and how you interpret that data hinges entirely on your theorizing and assumptions.
Yeah, I saw that when you were complimenting China for its communism, by pointing out its capitalistic reforms. Thanks, but no thanks. I have enough of mental gymnastics for today.

carnap
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Post by carnap » Wed May 16, 2018 2:53 am

mkm wrote:
Mon May 14, 2018 7:35 am
Development that occured 4 years after the end of the war (later for China). If the West wanted to destroy communistic countries, it had much better opportunity in that very time-frame, than later. Such a behaviour doesn't make sense in your narrative.
Your reasoning is based on an obvious hindsight bias. A war with Russia immediately after the Axis powers were defeated would have been strategically difficult. Europe was in no shape to fit another war and the US was also stretched thin. Furthermore while Russia lacked nuclear weapons at the time it did have chemical weapons. Also even if the war was won, that doesn't mean the nation will be magically transformed into what you want it to be. Look at the war with Iraq, the government was destroyed but the nation didn't turn into some western style capitalist state.
mkm wrote:
Mon May 14, 2018 7:35 am
If there are no laws of the economy, then what these models model, and why some models are better than the others?
They model the economy and a model is "better" if it is more predictive. But creating a model is by no means the same thing as establishing a natural law.
mkm wrote:
Mon May 14, 2018 7:35 am
Again, it's not narrative, these are facts. If comunnism negates the existence of laws of the economy, then it's not surprising that it's so economically inefficient.
Your claims about the nature of capitalism aren't "facts", you'll find all sorts of disagreement about capitalism by economists and philosophers. And there still aren't any "laws of the economy". You're speaking about "the economy" in an almost metaphysical matter, like it has some existence above and beyond human interaction. An economy is just a system of interaction, capitalism and communism represent two different ways of setting up an economy. You can compare the outcomes of the two systems but trying to interpret one system within the system of another amounts to a category error.

Though I'm not sure what you think the "laws of the economy" are because even within capitalist economics you have profound disagreement about just about everything.
mkm wrote:
Mon May 14, 2018 7:35 am
Each sensible theory should succesfully confront the reality, they are not just thought constructs without grounding in the reality.
I'm not sure what you mean by "the reality" here but it seems like it may be "my opinion". This discussion started out because I pointed at that the lack of any current state to achieve a communist economy could be due to transitional difficulties rather than what you were implying, that is, that there is some inherent problem with communist systems. Another potential reason communist states may fail to develop is that they conflict with human nature, for example, humans are hierarchical and status-driven while communist systems are egalitarian.
mkm wrote:
Mon May 14, 2018 7:35 am
I do this everytime you say something less vague than "capitalist conspiracy to discredit communism".
Except that I've never said that and you still haven't clarified what you're talking about.
mkm wrote:
Mon May 14, 2018 7:35 am
The point is that China began it's exodus from poverty by allowing just a little bit of capitalism. Why they had to, id communism is so great on its own?
I already answered that, because China doesn't exist in a vacuum. China needed to trade to bootstrap its economy and most key trading partners are capitalist. As I said, you can see it as a practical alternation to deal with the fact that the world today is dominated by capitalist powers.

The idea that China's success is due to its limited use of free-markets makes little sense. Not only is its overall economy still very much a planned economy but there are numerous nations around the world with much more capitalist oriented markets that are far behind China's development.
mkm wrote:
Mon May 14, 2018 7:35 am
Then why China wasn't a manufacturing power-house before it allowed West to come in? It doesn't make sense.
For the same reason the US wasn't until well after WW2, each nation has its own trajectory. China certainly took knowledge from western manufactures but then it innovated and now much of what people buy was made in China. In fact, more would likely be made in China if it wasn't for various trade barriers (e.g., China cannot effectively sale cars in the US).
mkm wrote:
Mon May 14, 2018 7:35 am
You may say the same thing for many other countries, but for some reason the only countries that are so stuck in proverty, are these that mimic communism the closest.
This is actually decidedly false, the poorest nations aren't communist leading states. Though how you compare nations is difficult, as discussed earlier, economic measures of GDP, wealth, etc don't provide good measurements of human well-being.

In any case, you seem to refuse to clarify anything you claim and you also seem to be trying to pigeonhole me as some sort of die-hard communist because I'm not demonizing communist in the way you wish. That to me speaks to a high degree of dogmatism.

mkm
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Post by mkm » Wed May 16, 2018 7:48 am

carnap wrote:
Wed May 16, 2018 2:53 am
Your reasoning is based on an obvious hindsight bias. A war with Russia immediately after the Axis powers were defeated would have been strategically difficult. Europe was in no shape to fit another war and the US was also stretched thin. Furthermore while Russia lacked nuclear weapons at the time it did have chemical weapons. Also even if the war was won, that doesn't mean the nation will be magically transformed into what you want it to be. Look at the war with Iraq, the government was destroyed but the nation didn't turn into some western style capitalist state.
To destroy communistic countries you don't have to turn them into Western style capitalistic states. And the massive edge of being only possessor of nukes is enough to achieve that goal. The problem is it wasn't, so your narrative fails.
carnap wrote:
Wed May 16, 2018 2:53 am
They model the economy and a model is "better" if it is more predictive. But creating a model is by no means the same thing as establishing a natural law.
Of course not, I elaborated on it in previous post. Even if we agree that there are no laws, we may as well call laws these things that we successfully model.
carnap wrote:
Wed May 16, 2018 2:53 am
Your claims about the nature of capitalism aren't "facts", you'll find all sorts of disagreement about capitalism by economists and philosophers. And there still aren't any "laws of the economy". You're speaking about "the economy" in an almost metaphysical matter, like it has some existence above and beyond human interaction. An economy is just a system of interaction, capitalism and communism represent two different ways of setting up an economy. You can compare the outcomes of the two systems but trying to interpret one system within the system of another amounts to a category error.
You could rewrite it and replace economy with physics: You're speaking about "the physics" in an almost metaphysical matter, like it has some existence above and beyond interaction of physical objects. I don't try to explain one theory in the means of the other, it would a mistake you are describing. No, I compare both to the reality.
carnap wrote:
Wed May 16, 2018 2:53 am
Though I'm not sure what you think the "laws of the economy" are because even within capitalist economics you have profound disagreement about just about everything.
It's the same thing with almost everything. The fact that philosophers don't agree what does it mean to exist, doesn't mean that we don't exist. You perform a nitpicking again similar to your activity in our discussion on truth in mathematics. Your problems invalidate everything or nothing, depending on how we look at it.
carnap wrote:
Wed May 16, 2018 2:53 am
I'm not sure what you mean by "the reality" here but it seems like it may be "my opinion".
Not really, I may be over the top sometimes, but for example death of 5% of people due to starvation in China thanks to stupid communistic reform is the reality, not my opinion. And it's you who have to do mental gymnastics to think that such an event occurring in the communistic is coincidence. It wasn't a coincidence, it was the result.
carnap wrote:
Wed May 16, 2018 2:53 am
This discussion started out because I pointed at that the lack of any current state to achieve a communist economy could be due to transitional difficulties rather than what you were implying, that is, that there is some inherent problem with communist systems. Another potential reason communist states may fail to develop is that they conflict with human nature, for example, humans are hierarchical and status-driven while communist systems are egalitarian.
Not accounting the "human nature" is another problem with the form of government, not people. Otherwise you put yourself in the position where you have decide whether some people are fit for your dream system, and which are not and should be sent to reeducation camps or... other type of camps.
carnap wrote:
Wed May 16, 2018 2:53 am
Except that I've never said that and you still haven't clarified what you're talking about.
I'm paraphrasing. You said that "communism has never been able to grow in a nation without capitalist trying to destroy it", but your narrative is weak and doesn't agree with actual events.
carnap wrote:
Wed May 16, 2018 2:53 am
I already answered that, because China doesn't exist in a vacuum. China needed to trade to bootstrap its economy and most key trading partners are capitalist. As I said, you can see it as a practical alternation to deal with the fact that the world today is dominated by capitalist powers.
There were a lot of communistic trading partners to choose from. Why capitalistic? You also talk about these things like it was the case that capitalistic states just happen to have stronger economies by luck, and communistic countries just has been dealt with a worse hand. Your apology of communism just becomes more hilarious in that regard.
carnap wrote:
Wed May 16, 2018 2:53 am
The idea that China's success is due to its limited use of free-markets makes little sense.
And why is that? Just another coincidence that rapid growth of China started just when China opened its market just a bit?
carnap wrote:
Wed May 16, 2018 2:53 am
Not only is its overall economy still very much a planned economy but there are numerous nations around the world with much more capitalist oriented markets that are far behind China's development.
Of course, but trend is clear. The freer the market (reflected by IEF for example), the wealthier the country. Maybe it has also something to do with sheer number of people in China and the fact that they were let work in a productive manner?
carnap wrote:
Wed May 16, 2018 2:53 am
For the same reason the US wasn't until well after WW2, each nation has its own trajectory. China certainly took knowledge from western manufactures but then it innovated and now much of what people buy was made in China. In fact, more would likely be made in China if it wasn't for various trade barriers (e.g., China cannot effectively sale cars in the US).
Again you are factually wrong. USA already had ~20% of world's GDP before the WW2. Also, no sensible, profitable innovations were made in China until recently, and surely not high tech.
carnap wrote:
Wed May 16, 2018 2:53 am
This is actually decidedly false, the poorest nations aren't communist leading states. Though how you compare nations is difficult, as discussed earlier, economic measures of GDP, wealth, etc don't provide good measurements of human well-being.
Of course, any measurable outcomes don't matter, when they contradict your narration, but they are trustworthy if they show for example China's growth. Be consistent at least.
carnap wrote:
Wed May 16, 2018 2:53 am
In any case, you seem to refuse to clarify anything you claim and you also seem to be trying to pigeonhole me as some sort of die-hard communist because I'm not demonizing communist in the way you wish. That to me speaks to a high degree of dogmatism.
And projection at the finish.

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