In response to comment by ciphergoth on Awful Austrians
Comment author: Shane 14 April 2009 01:27:27AM 0 points [-]

Austrians believe that modeling for purposes of prediction is fruitless. Modeling for the purpose of control is unethical and oppressive because property rights are violated.

Other economists believe they can successfully model and manage an economy. They deal in numbers without taking into consideration human action at a level that has explanatory power. Monetarists, Keynesians, etc. ignore human action and generally treat the notion as unimportant. Austrians claim human action cannot be modeled, but knowledge of human action is required in order to model.

Austrians, for example, are able to model the effects of unrealistically cheap money, which is the source of malinvestment which leads to a boom bust cycle. We are experiencing the bust now.

With Austrians, things that can be modeled are modeled. Things that cannot be modeled or achieved are accepted, rather than, like the Keynesians, arrogantly claiming knowledge which is proven wrong time and time again.

Every time we have a bust, we are first told it should never have happened because after the last bust the bankers were given the tools necessary to prevent the bust. Then we are told that they just need a few more tools in their bag in order to fix the problem and ensure it never happens again. Then it happens again, each time bringing us nearer to the hyperinflation of 1920s Germany or today's Zimbabwe.

The economists which claim to be able to manage our economy for our good are either liars or incompetents or both. And we are supposed to accept their critique of the Austrian baseline?

Claiming the presuppositions are wrong is fine, if one can show that these need not be presuppositions because they can indeed be measured and worked into a predictive model... This proof I have not observed in a research model, let alone in the applied science, which we live with daily.

In response to comment by Shane on Awful Austrians
Comment author: nateemmons 14 April 2009 01:05:11PM 0 points [-]

I would be cautious saying "Modeling for the purpose of control is unethical and oppressive because property rights are violated" purely because I wouldn't want people to get the idea that Austrian Economists consider economics as normative. Austrian Economics may point out that the economic calculation problem shows that central planning is impossible, but it's libertarian political philosophy that talks about things being 'ethical' or 'unethical'. I think it's important to keep the distinction between economics and political philosophy very clear.