Sunday, December 22, 2013

OUTRAGEOUS Twisting Ludwig von Mises Beyond Recognition

Peter Boettke, Professor of Economics and Philosophy at supposed Austrian school influenced George Mason University, has a column out at FEE, where he writes:
ranting about the use of models in economics isn’t going to work. Students of economics not only have to learn the logic of economic argumentation, but how to make the technical representations of those arguments at the relevant levels of abstraction. In short, economics students have to study a lot of math and statistics to become professional economists[...]mathematical modeling and statistical testing is the scientific language in which professional economists speak. Trying to become a professional economist without learning that language would be the equivalent of trying to become a French historian without learning French.
Now, if Boettke, went on to say that mathematical economic modeling, though prevalent in academia, is the wrong road for economists to take, we could cut him some slack. But he doesn't. He leaves dangling the notion that mathematical economics is important to correct economic analysis. This flies in the face of the methodology of  the Austrian School of economics, which holds that economics is a deductive science that starts from very basic premises and deduces theory from there.

Yet, in this same column, where Boettke takes a completely anti-Austrian position on methodology, he  somehow concludes with this doozie of a comment:
I can do no better than the great Ludwig von Mises when he gave a similar reply: “Nobody asked you to be an economist.” To become an economist, you have to be willing to put in the hard work. Complaining about learning tools is similar to a carpenter complaining about learning about screwdrivers and hammers. The tools themselves are necessary but not sufficient to becoming a good carpenter. You have to put the tools to good use. The same goes for the aspiring economist.
Mises was a key player in the development of the Austrian school of economics and also its methodology. It is really quite outrageous to link Mises in anyway with mathematical modeling. Boettke does it in a clever manner, he doesn't really state Mises' view on mathematical modeling, he just brings Mises into the discussion on studying hard. Yes, Mises was always in favor of studying hard, but he certainly was not in favor of mathematical modeling. This is very typical of what goes on at GMU. It's occasional Austrian name dropping peppered with the some of the most outrageous anti-Austrian positions in academia. It is a hall of mirrors approach to economic education.

Here's what Mises really said about math, statistics, and economics:
Those economists who want to substitute "quantitative economics" for what they call "qualitative economics" are utterly mistaken. There are, in the field of economics, no constant relations, and consequently no measurement is possible. If a statistician determines that a rise of 10 per cent in the supply of potatoes in Atlantis at a definite time was followed by a fall of 8 per cent in the price, he does not establish anything about what happened or may happen with a change in the supply of potatoes in another country or at another time. He has not "measured" the "elasticity of demand" of potatoes. He has established a unique and individual historical fact. No intelligent man can doubt that the behavior of men with regard to potatoes, and every other commodity is variable. Different individuals value the same things in a different way, and valuations change with the same individuals with changing conditions.
The predilection with which mathematical economists almost exclusively deal with the conditions of imaginary constructions and with the state of "equilibrium" implied in them, has made people oblivious of the fact that these are unreal, self-contradictory and imaginary expedients of thought and nothing else. They are certainly not models  for the construction of  living society of acting men.


  1. A key element in court economics, twisting facts to bamboozle people into submission.

  2. And this is why I continue to read EPJ. RW keeps it REAL. If he didn't, I would have already left.

  3. There is no real need for math. You start with the conclusion that govt tried to cause X to happen but caused the exact opposite of X to happen. Then you use the action axiom to explain why that happened. Then you conclude that there is a stock market bubble, a housing bubble. Finally, buy gold since hyperinflation is due any day now. The economy is going to collapse, it's inevitable since the Bible says not to alter weights and measures and public policy always alters weights and measures. Civil govt has exceeded its influence, sinned and the public will pay for allowing it to happen. Public stoning at noon, parents must participated, all others are invited.

    1. @ Jerry
      First three sentences are a fairly reasonable, albeit truncated, a prior Austrian reasoning. The rest departs into specific predictions which are the antithesis of Austrian theory.

      "Hyperinflation due any day now?" - Definitely too specific under Austrian theory.

      The rest is just your usual inflammatory, nonsensical keyboard vomit.

    2. Boettke is correct in saying that "economics students have to study a lot of math and statistics to become professional economists." The key word is "professional." Ever since economics emerged as a branch of the social sciences, the only sure way to make a living as an economist is to curry the favor of State actors by coming up with theories that justify their violent intervention into peaceful market action. Econometrics has developed as the best method of obscuring basic theory so as to justify State intervention. Thus, if one wants to get paid as an economist, one does have to jump into the econometric pool. Unfortunately, Boettke cannot bring himself to say that the higher path is to place the search for truth in economics or selling out to the State. Mises and Rothbard took this higher path and thus never made half the money, or had even a fraction of the fame.

  4. "He leaves dangling the notion that mathematical economics is important to correct economic analysis." Whatever you might think of FEE, they now have one million dollars in cash to do more of it, thanks to their forward thinking approach. This million dollars came from a single donation; paid in Bitcoin.

    Even if FEE is wrong, they can now afford to be wrong. This is the true path of the intellectual, that differentiates them from the fanatic cult member; he is willing to risk and experiment in thought and action. For certain if there is something new to learn, FEE will learn it first.

    1. What kind of crackpot thinking is this? Does this mean a Soros funded organization that has received $2 million from Soros is superior to FEE? Is it really about who gets the biggest donation or who speaks untwisted truth?

      As for the Bitcoin donation, did FEE keep it in the great bitcoins and likely lose at least 40% of value or did they liquidate it immediately and put it in dollars?

      Is anyone at FEE taking their salary in a fixed monthly amount of bitcoins?

    2. They're not 'experimenting in thought'. They're repeating old fallacies. Mises buried this kind of thinking 7 decades ago.

      If the International Astronomers Union suddenly starts pushing for astrology, would you start praising that as "experiment in thought"?

    3. "Does this mean a Soros funded organization that has received $2 million from Soros is superior to FEE?" Obviously not Robert; what it means is that they will be able to experiment more in the correct direction. and out compete others for brainpower; you have just thrown up a Straw Man argument. Surely you can do better than this?

      Whatever they did with the Bitcoins, they either have 1,000,000 dollars or 650,000 dollars to hand to do their work, according to MTGOX's charts. Surely you cannot claim that neither amounts are useful to them? Once again, this is a threadbare argument. But the worst one is yet to come, as you run out of steam:

      "Because they do not take Bitcoin as their salary, its worthless".

      Truly, you expose yourself and your inability to understand the most basic elements of how things work every time you try and write something related to Bitcoin. Its like you have a mental block.

      There is no way an intelligent man like you cannot understand Bitcoin. This means that you are either pretending not to like it to garner page views, or you indeed, cannot understand it, which calls into question your ability to understand other topics.

      Either way, you are going to have to come up with something better than ad hominem attacks and Straw Men to claim that FEE will not benefit from getting 10.000 Bitcoin to use in whatever way they like.

  5. I started a higher degree in Econ. I could do the math. I was shocked to see that just about anyone in the program could do the math, but no one could explain WHY. It was math for math's sake. Building models that had no basis in reality. A guy thinks that because he's a physics major he can tell us about how money will behave as if each dollar were quarks and the owners of dollars atoms. Sheer idiocy. Modern Econ has deep epistemological problems. And they'll never be solved because no one will admit that they have a problem. Math means they can't be wrong. (Or so they think.) it's awful.

    1. I had exactly the same experience. I started a higher degree in econ and could do the math. However, I could see that what was being done with the math had nothing to do with reality.

      Also, it soon became obvious to me that the epistemological problems of academic economics would never be solved, because academic economics is not about economics. It's about academics.

  6. After taking my first economics course to complete my minor in economics in college, I can definitely say that mainstream economics emphasize graphs and mathematics too much. When discussing certain topics, like monopolies for example, major points were made in relation to some form of graph with sayings like "This causes a downward shift in the demand curve" etc. This is why many people do not like economics: it sounds like it is detached from reality! That is why Austrian economics makes economics exciting. Austrian economics actually relates key economic ideas to the real world with real world application. Forget the math and graphs of economics; human action is what economics is all about!

  7. The scary part is Boettke is actually the best of the so called GMU 'Austrian' economists.

  8. Bitcoin comes from an outfit that is ostensibly private but heavily staffed with defense research personnel.

    Not 100 percent sure, of course, but all the evidence points that way.

    It is not Japanese, but Anglo-Jewish.

    It is a New World Order operation - that is what is wrong with it. The sparring over whether it's good or bad in theory is beside the point.

    Gold might be a good investment, but if the bankers own the mining industry, they will use it for their own ends.

    BTC might be great, but if it's being run by state operatives, of course it is a trap.
    So think through these things.

    TOR is encryption being pushed by covert parts of US intel. Who would trust it?

    It is like lauding Google for its privacy measures.

    Made members of the Rothschild mafia can trust it.

    Fellow travelers and sycophants of the Rothschild mafia, posing as libertarians but always on the side of the mafia and its groupies - THEY can trust it.

    No one else should.

    Via NSA snooping, cell phone monitoring, the mafia surely knows exactly what each one of you really thinks about the subject in the privacy of your own home. If you are an opportunist who goes with the flow, they have nothing against you.

    If you have firm principles, have supported dangerous anti-establishment positions, are religious or a social conservative in any way, are anti-Rothschild, are anti-cartel/anti-special interests or have spoken out against major establishment mouthpieces, taken "anti-Semitic" positions, they have your number and they can manipulate your BTC account any way they want.

    And they will.

  9. Lila,

    Any proof for any of the assertions you put forward above? TOR is being pushed by US intel? Why so that regular people can use technology to increase privacy and skirt the state?

    "BTC might be great, but if its being run by state operatives, of course its a trap." Nobody "runs" bitcoin, its a decentralized network. Its open source. Go look at the code yourself. Go look at what all the computer scientists who have examined the code think about it. Even if it was created by defense intel people its not controllable. How can anybody 'manipulate" your btc wallet account? Do you have any evidence for the assertion?

  10. @Anonymous

    I would love to LOVE Bitcoin. Sounds great. Hip, futuristic, geeky, sexy.
    I understand that btc can't be "run" in the usual way. But decentralized things can also be "run"...only in a decentralized way....

    Btc was started...and the people who started it (and know most about it) can connect with each other.
    They can work (buy or sell) in a coordinated way. I'm sure they can, regardless of how uncontrollable you say it is.

    So I don't have enough technical knowledge to say for sure that it "can't" be manipulated. I don't trust something just declared to be safe by anonymous people on the net and a handful of programers whom I don't know. I can trust experts to be experts but not to be either good or wise.

    I know BTC has come out of Israeli defense science research....or, more accurately, a private outfit hiring Israeli defense scientists....and others.

    At least, that's what I see when I look.
    I know it's not a libertarian but A COMMUNITARIAN project (think Etzioni).
    That doesn't give me hope.
    Besides, so far, everyone I know who has promoted it has been someone whom I suspected WOULD promote it because they have already shown themselves to be connected to US intelligence/Rothschilds cartel in other ways

    I'll save the rest for a book or maybe sell it to a renegade Latin American dictator.