Comment on Awful Austrians

Mon, 13 Apr 2009 18:47:31 GMT

Austrians recognize that there is an unquantifiable variable in economics, namely human action, which heavily influences economic outcomes. You want to insert an arbitrary (estimated) variable value, i.e. probability estimate, in a model to account for something that Mises claims cannot be accounted for based on experience and historical fact.

Since you seem to believe that the variable value can be known and quantified for modeling purposes, what is it? What are the attributes of the variable collection which represent human action in economics?

Mises claims that human action is present, significant and cannot be measured. Are you claiming human action is absent, insignificant or measurable?

If you can set up the conditions to prove your case experimentally, then you have an argument.

How are your assumptions, i.e. probability estimates, inserted in a model going to provide feedback that will enable a valid update of the priors? Is that not circular reasoning?

If the claims made by Mises and the Austrians went no farther than to say human action cannot be measured and therefore nothing in economics can be measured, you would have an argument simply because their thinking would be inadequate. This is not the case.

To the contrary, Mises thinking regarding economic calculation in the socialist commonwealth clearly shows that human action coupled with ownership is a required component of a healthy and sustainable economy. Human action is necessary and yet cannot be measured or predicted, except that people are going to act in such a way as to satisfy their own self interest, which is conditional and subjective.

If experience and fact can be used to account for human action in economics, then Mises claims are false.

If they cannot, why discount his theory because he acknowledges a real-world constraint using a presuppositional argument?

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