[Michael E. Marotta]

Ruth, on Mar 25 2009, 04:07 AM, said:

Whether they are "discredited" with some undefined groups of persons - and whether their Bear Market position is profitable -- is irrelevant to the validity of their science.

No it isn't. Reality is the final arbiter and final judge of their 'science'. If one is consistently wrong in the real world - not some ivory tower where results are not important- one is rightly discredited and sent packing.

Allow me to continue with the analogy of Chemistry and Dow Chemical as to Economics and the Von Mises Institute. If Dow Chemical claims, that there is no pollution in the river and then that the pollution is within acceptable levels and then that the levels established by the govenment are unreasonable, none of that invalidates chemistry as a science.

Similarly, as the VMI gathers contributions from gold bugs who like to hear about the end of the mixed economy, their constant news cycle and supporting feature articles will cater to that group of consumers. That has nothing to do with the subjectivity of values or the importance of price as a signal to producers. If you can show a failure of Von Mises via Human Action or Socialism, then that is a valuable contribution to the body of knowledge. in fact, when you consider that "Austiran" economics includes Schumpeter and Hayek, who are divergent. Your caveats about the "permabears" is also cogent. (My wife's catch-phrase from another advisor is that they are "on a bear tear." If the Cassandra cries have the accuracy of astrology, people will find reinforcement for their beliefs regardless of the objective facts.

[Austrian Economics] has had some, albeit limited, direct influence on the evolution of strategic management, for example, on work on competitive dynamics (Young et al., 1996), entrepreneurial top-management teams (Foss et al. 2008), and the tangled links between rents and costs (Lippman and Rumelt, 2003). Nevertheless, there are very significant overlaps between AE and the core of strategic management thinking over the last two decades or so.Austrian Economics and Strategic Management (18 March 2009) by Nicolai Foss. Organizations and Economics.

Here is a summary of Austrian Economics from Wikipedia. (Just so we're on the same page here.)

Quote

It emphasizes the spontaneous organizing power of the price mechanism, holds that the complexity of subjective human choices makes mathematical modelling of the evolving market extremely difficult (or impossible) and therefore advocates a laissez faire approach to the economy. Austrian School economists advocate the enforcement of voluntary contractual agreements between economic agents, but otherwise the smallest imposition of coercive force (especially government-imposed) on commercial transactions.

Although often controversial, the Austrian School was once influential dating back to the early 20th century, but currently contributes relatively little to mainstream economic thought.[3][4] The Austrian School derives its name from its predominantly Austrian founders and early supporters, including Carl Menger, Eugen von Böhm-Bawerk and Ludwig von Mises. Despite this name, supporters and proponents of the Austrian School can come from any part of the world, and there are now few Austrian School economists of Austrian nationality. Prominent Austrian School economists of the 20th century include Joseph Schumpeter, Henry Hazlitt, Murray Rothbard, and Nobel Laureate Friedrich Hayek. The Austrian School now lies outside the mainstream.[1]

Austrian School economists advocate strict adherence to methodological individualism – analyzing human action from the perspective of individual agents.[citation needed] Proponents of this method, praxeology, argue that the only means of arriving at a valid economic theory is to derive it logically from basic principles of human action. Proponents of this method hold that it allows for the discovery of fundamental economic laws valid for all human action. Alongside praxeology, the school has traditionally advocated an interpretive approach to history to address specific historical events. Critics of the Austrian school contend that its methods consist of post-hoc analysis and do not generate testable implications; they argue this approach fails the test of falsifiability.[3]

1 a b c Boettke, Peter J.; Peter T. Leeson (2003). "28A: The Austrian School of Economics 1950-200". in Warren Samuels, Jeff E. Biddle, and John B. Davis. A Companion to the History of Economic Thought. Blackwell Publishing. pp. 446–452. ISBN 978-0631225737. http://books.google.com/books?id=3H8gBQv5M...vKdDw#PPA445,M1.
2 Boettke, Peter. "Is Austrian Economics Heterodox Economics?". The Austrian Economists. http://austrianeconomists.typepad.com/webl...strian-eco.html. Retrieved on 2009-02-13.
3. a b c d e f Caplan, Bryan. "Why I Am Not an Austrian Economist". George Mason University. http://www.gmu.edu/d...lan/whyaust.htm. Retrieved on 2008-07-04.
4. Mankiw, Greg. "Mankiw: Austrian Economics". http://gregmankiw.blogspot.com/2006/04/aus...-economics.html. Retrieved on 2009-02-08.

This post has been edited by Michael E. Marotta: 25 March 2009 - 08:32 PM

[Ruth]

Hi Michael,

Believe me I wish Austrian economics was seen as valid. I spent a year writing to newspapers about Mises and so on - all to no avail because reality got in the way.

Perigo and his sycophants hate me for it, but I tell the truth. My family has had over 40 decades experience in high level finance, so we know what we are talking about.

Both as a short term policy to save the economy, and as a long term strategy around which government and society were constructed to provide stability, the New Deal was seen by the people as an unqualified success. For their opposition to it, the Republicans were banished from legislative control for almost 50 years.

Obama's stimulus package will be the same. Austrian claims that his package would delay recovery are patently false as we see recovery starting already. IMO Republicans will suffer the same fate as they did in the Roosevelt era.

I may be wrong, but I doubt it.

This post has been edited by Ruth: 26 March 2009 - 12:35 AM

[Michael E. Marotta]

Ruth, on Mar 26 2009, 02:33 AM, said:

Hi Michael, Austrian claims that his package would delay recovery are patently false as we see recovery starting already.

Author: MacKenzie, Donald A.
Title: An engine, not a camera : how financial models shape markets /
Publisher: Cambridge, Mass. : MIT Press, c2006.

Quote

Roughly speaking, the idea was that social explanations of the acceptance or rejection of scientific theories need not take a position on the truth or falsity of those theories. Sociological processes or social factors were not not to be invoked just to explain the acceptance or persistence of seemingly false beliefs, but seemingly true ones as well. ... The implication is that economic theories are successful because they can get themselves enacted, and not that they get enacted because they are successful. Although MacKenzie disavows this interpretation early on (20), the book leaves a fairly wide space for ambiguity. -- Kieran Healy
http://orgtheory.wordpress.com/2006/12/11/...hy-performance/

[galtgulch]

Ruth, on Mar 26 2009, 12:33 AM, said:

Hi Michael,

Believe me I wish Austrian economics was seen as valid. I spent a year writing to newspapers about Mises and so on - all to no avail because reality got in the way.

Perigo and his sycophants hate me for it, but I tell the truth. My family has had over 40 decades experience in high level finance, so we know what we are talking about.

Both as a short term policy to save the economy, and as a long term strategy around which government and society were constructed to provide stability, the New Deal was seen by the people as an unqualified success. For their opposition to it, the Republicans were banished from legislative control for almost 50 years.

Obama's stimulus package will be the same. Austrian claims that his package would delay recovery are patently false as we see recovery starting already. IMO Republicans will suffer the same fate as they did in the Roosevelt era.

I may be wrong, but I doubt it.

Ruth,

"over 40 decades" Hmmm! Are you certain? That would mean 400 years or 4 centuries! What a fascinating family if so. Did you mean 4 decades?

Regarding your expectation that Obama will take credit for saving our economy, even though the recovery will include a period of hyperinflation caused by the Fed, there is another factor to be considered.

The growing Campaign For Liberty is engaged in enlightening those around them all across the country of the Austrian school of economics and its perspective. Each of their members is in the process of making a study of it so there will be widespread understanding in time.

www.campaignforliberty.com 26Mar 6 AM 128802, 5PM 129316; 27 Mar 10PM 130328 which includes over 125 college campus contingents.

gulch

This post has been edited by galtgulch: 27 March 2009 - 08:17 PM

[Michael E. Marotta]

Relative Prices Matter is an essay on the Organizations and Markets blog here.

O&M is sociology blog run by these four professors.

• Nicolai Foss Professor at the Copenhagen Business School and a Professor II at the Norwegian School of Economics and Business Administration. and director of the Center for Strategic Management and Globalization at the CBS.
  
• Peter G. Klein. Professor in the Division of Applied Social Sciences at the University of Missouri, Adjunct Professor at the Norwegian School of Economics and Business Administration, and Associate Director of the Contracting and Organizations Research Institute (CORI).
  
• Richard N. Langlois Professor of Economics and Director of Undergraduate Studies in Economics, University of Connecticut.
  
• Lasse Lien, Associate Professor, Norges Handelshøyskole (NHH).

This post has been edited by Michael E. Marotta: 28 March 2009 - 04:58 PM