I've seen several people on Less Wrong recommend Mencius Moldbug's writings, and I've been curious about how he became so popular here. He's certainly an interesting thinker, but he's rather obscure and doesn't have any obvious connection to Less Wrong, so I'm wondering where this overlap in readership came from.
[EDIT by E.Y.: The answer is that he's not popular here. The 2012 LW annual survey showed 2.5% (30 of 1195 responses) identified as 'reactionary' or 'Moldbuggian'. To the extent this is greater than population average, it seems sufficiently explained by Moldbug having commented on the early Overcoming Bias econblog before LW forked from it, bringing with some of his own pre-existing audience. I cannot remember running across anyone talking about Moldbug on LW, at all, besides this post, in the last year or so. Since this page has now risen to the first page of Google results for Mencius Moldbug due to LW's high pagerank, and on at least one occasion sloppy / agenda-promoting journalists such as Klint Finley have found it convenient to pretend to an alternate reality (where Moldbug is popular on LW and Hacker News due to speaking out for angry entitled Silicon Valley elites, or something), a correction in the post seems deserved. See also the Anti-Reactionary FAQ by Scott Alexander (aka Yvain, LW's second-highest-karma user). --EY]
When it comes to monetary theory, there are no controlled experiments possible. So, one has to use deduction. Moldbug's article above on 'Crash Course in Sound Economics' is a masterpiece on the topic and thus an excellent starting point. When I introduce the topic of questioning the quality of mainstream economics to friends, I put it this way: "All the various mainstream economic theories cannot be simultaneously right. So, given the number of mutually exclusive theories and the fact that controlled experiments are not possible, one has to deduce from first principles. So, let's do that."
When one deduces from first principles, one just so happens to end up with Austrian (Misesian) Economics. The deduction is not complicated. For LessWrong members, it will be easy, I think.
Misesian Economics does make predictions (i.e., pays rent) but the predictions are about whether a certain economic policy is good or bad for the economy and whether the policy is sustainable. It does not claim to precisely predict either magnitude or timing of economic disruptions caused by bad policies, because the disruptions are dependent on economic actors reacting to both new economic information & to other peoples' reactions to the same information. Given the economic policies we are currently being subjected to, the rent, that a study of Misesian ideas will pay down the road, will likely be substantial.
For those who prefer books, I suggest reading both 'Paper Money Collapse' and 'Currency Wars', in that order. If anyone here is also studying economics (given the economic developments in the last 5 years, I imagine some might be), I would enjoy a discussion.
P.S. With all due respect to Prof Krugman, he is not only wrong about Misesian Economics, he does not even properly understand what he is criticizing. His advice about how to end the current economic malaise is incorrect and thus harmful (though well-intentioned). Those who follow the financial news would have noticed a Prof Sumner being hailed as having "saved the US economy" because his idea of NGDP-targeting has in effect been adopted by the Federal Reserve. Prof Sumner does not seem to understand Misesian Economics either and his advice is also incorrect and thus harmful (and again, I am sure, well-intentioned).
Here is a quick test one can do: Read what Prof Sumner says about Prof Krugman's theories and vice versa. So, who does one follow: The Nobel Laureate or the man the Federal Reserve seems to be following? Perhaps neither? We certainly cannot follow both, if we have any interest in even superficial coherence. And, given the importance of the topic (the wealth of billions), I think we should aim for the highest level of coherence that is humanly possible.
The leap from "controlled experiments are not possible" to "one has to deduce from first principles" is huge and unsupported. The results of controlled experiments do not exhaust the available empirical evidence by a long shot. We have a lot of data about the effects of monetary policy from around the world. True, inferring causality from this data is not nearly as straightforward as inferring causality from a randomized controlled trial, but it's still a lot more reliable than deduction from first principles, I would think.
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