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MORE ON BOETTKE’S HYPOTHESIS (AND CAPLAN’S CRITICISM OF HOROWITZ) : WHY AUSTRIANS ARE’T MAINSTREAM

Caplan has it correct in his own odd way, as usual. Then he proceeds, as he does with ‘Why I’m not an Austrian’ to contradict himself with the same kind of logical problem he accuses others of making. (In the most famous case, that incentives are more important than calculation. And failing to realize that such a statement is meaningless, since incentives require calculation – the terms are mutually dependent.)

BARRIER TO ENTRY

The barrier to entry for quantitative macro economics is higher than the barrier to entry for subjective MORAL politics. Because of this, of course there will be more ridiculous ‘austrian’ advocates than there are ridiculous amoral quantitative macro economists like Paul Krugman and Brad DeLong. And its easier to criticize abuse of an ISLM vs ISMP curves because there isn’t any subjective loading possible. They aren’t’ dependent upon norms. Whereas it’s very easy to criticize abuse of involuntary transfers according to whatever set of norms we have learned over our lifetimes.

PRAXEOLOGY

I’ve consistently criticized Praxeology – which is a narrower discipline than austrian economics, because it does not treat opportunity costs as real costs, and as such, both Mises’ and rothbard’s deductions from it are mistaken – because they do not account for the cost of norms, and as such, they assume that the market is sufficient for the constraint of norms – or at least sufficient to constrain norms to the point where private property is possible because of high trust. And Mises and Rothbard are wrong on this. And because they are wrong, the entire libertarian movement has tried to base the justification for private property on natural law, argumentation, and abstract morality rather than something scientific and explanatory of all moral codes – as I have done.

NORMS, TRADITIONS AND TRUST AS CAPITAL

I don’t put a lot of stock in Austrian ‘Economics’ because it’s frankly all been assimilated by the profession. It’s that the long term consequences to norms and institutions have NOT been incorporated into the mainstream profession, and are treated as irrelevant. While in Austrian terms, norms are not – particularly if we include Hayek.

It turns out that norms are VERY important. They are the most expensive kind of capital a nation can build. Norms are a living monument. Thats’ why younger civilizations with less scientific maturity have trouble creating them.

So I tend not to make Austrian versus the Mainstream a question of empirical science, but a distinction in WHAT MUST BE MEASURED in order to make sure that we are in fact creating rather than consuming or destroying capital. This is not an argument over method per se. The progress in the empirical method, do more to the contribution of Experimental Psychology than to economics in my opinion.

I criticize the mainstream for not measuring changes to normative (informal capital) because it is convenient to ignore it, and by ignoring it they justify both the progressive and statist agenda.

The problem is that it is very difficult to measure such changes to norms, traditions, and other factors that we tend to bundle into the abstract but somewhat measurable distinction between TRUST and CORRUPTION. Or, what is more accurately described as the extension of the familial (kinship) trust, to others (non-kin) by the suppression of all involuntary transfers except market competition, and the systemic enforcement of warranty to prevent fraud by omission.

GENES AS CAPITAL

As a member of the ‘Dark Enlightenment’, I consider a gene pool a form of capital. I also think that Austrianism, like Aristocracy (and what we call Conservatism) implicitly favors beneficial market-based eugenics, while progressivism implicitly favors destructive dysgenics by not allowing families to concentrate capital behind productive genes, and transferring reproductive ability from better genes to worse genes.

SUMMARY

So Austrianism is flawed because it has a low barrier to entry, because praxeology as articulated is false, and has led libertarianism into catastrophic errors even Hoppe has only marginally been able to rescue it from.

But Austrianism is useful in that it a) allows us to test the rationality of actions and incentives, b) makes visible involuntary transfers c) tries to account for increases or decreases in informal institutional capital d) implicitly represents the conflict between dysgenic and eugenic reproduction that is the natural conflict between male and female reproductive strategies. And as such Austrianism helps us understand why there is political discord, and provides us with clues, that I have made use of, to provide explanatory power in politics, that is not provided by correlative macro mathematics.

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(For Reference)

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BOETTKE’S HYPOTHESIS WHY AUSTRIANS ARE NOT MAINSTREAM

“Verbal logic is not adequate to explain economic relationships. In the absence of formal logic, one cannot really test propositions. In other words, syntactic logic matters more than semantic logic.” (Hypothesis H4)

AND

“Science is not about absolutes, but about refutation. If AE is about (apodictic) certainty, then it is not a science, but a pastime.” (Hypothesis H5)

Well I disagree with AE as apodictic unless it’s complete. As I’ve written elsewhere it’s not complete. However, if expressed as complete, then it’s possible to propose means of falsification. And “m not sure it isn’t possible to model. Just very, very difficult, because we need much, much more data than we have today. Tis is where experimental psychology comes in.

In this sense, AE has a higher bar, because it tries to provide greater explanatory power than mainstream economics.