Wednesday, July 27, 2011

Assault of Thoughts - 7/27/2011

"Words ought to be a little wild for they are the assault of thoughts on the unthinking" - JMK

- Casey Mulligan apparently now thinks Keynesians don't think supply matters or evidence of labor supply fluctuations somehow invalidates Keynesians points. Sigh... I'm going to sigh even deeper when Greg Mankiw reposts this later, which he usually does.

- Gene Callahan calls our attention to a Mercatus working paper coauthored with Steve Horwitz on the role of ideal types in ABCT. The conclusion is very much the sort of attitude I approached the issue with in my 1920-1921 paper: "the amount of illumination that the Austrian Business Cycle Theory can cast upon any particular historical happening varies directly with how nearly the specific circumstances of the time in question approach the idealized state of affairs assumed in constructing the various ideal types it incorporates. With this explanation, it then becomes clear that the Austrian Business Cycle Theory is not the only possible explanation of macroeconomic downturn but provides a possible account of specific historical episodes."

- Last night at the LSE, Robert Skidelsky and Duncan Weldon debated George Selgin and Jamie Whyte in a "Keynes vs. Hayek" debate. The podcast should be up soon - I'll post that as well as thoughts in the next couple days.

- Stickman writes about Norway here and here. In the first link I provide he compares the murder rate in Norway to the rate in South Africa (both countries with which he's intimately familiar). I'm not entirely sure this is the best way to frame the violence. Human stress and strain is always going to produce a background level of violence, and in conditions where that stress is greater we're going to see higher levels of violence. There's something different and more disconcerting about violence as a political tool, whether it's in Norway, the Middle East, or a civil war in Africa that claims millions - whether its organized or done by a loner.

- And speaking of Norway, if you haven't worked through the comments of my earlier post, some of them are worth reading - particularly a lot of good insights from Gene. Some people - on this blog and elsewhere - have taken my post as saying that Breivik is typical of libertarians and libertarians are bad. If you think I said that, you need to reread the post.


  1. When it comes to Brievek the greatest sin of libertarianism was that he openly rejected it. Apparently we weren't that convincing.

  2. The idea of a Keynes vs. Hayek debate implies that the pursuit of knowledge is a zero-sum debate between accepting Keynes and accepting Hayek. Any concession towards Hayek somehow becomes a loss towards Keynes and any concession towards Keynes somehow becomes a loss towards Hayek. Why Keynes vs. Hayek, when you could do Keynes + Hayek - Bad Ideas?

    Obviously, that is not how it really works.

    To make it worse, the debate is about the current financial problems, as the link shows. Keynes and Hayek died decades ago. They are not alive to see this crisis and they are not alive to analyze it. That is up to today's people.

  3. I largely agree Prateek. I think we can learn something from these "debates", but it is all pretty artificial. The idea that this is the "fight of the century" is completely made up in the minds of people that are more interested in conflict than in actually advancing our understanding of the economy.

    I find that:

    1. Fans of Hayek that don't understand Keynes largely profess not to like him.
    2. Fans of Hayek that do understand Keynes appreciate and like Keynes, even if they don't agree on everything.


    3. Fans of Keynes that know only caricatures of Hayek never like Hayek.
    4. Fans of Keynes that understand Hayek appreciate him a lot.

    The idea that we have to choose between two of the most insightful economic thinkers of the twentieth century is absurd.

    I said before that in the Keynes/Hayek rap I'm personally rooting for Hayek. I'd be rooting for both of them if I recognized Keynes, but I'm happy to concede that Russ and John's Keynes lost to Hayek.

  4. Billing it the "Fight of the Century" is for entertainment purposes. Obviously Keynes and Hayek would also never lace up and fight in a ring against one another. There is a reason why both videos have had so many hits; they're fun, entertaining and educational. Like I've said in the past; if you've got a better idea or product along these put it out and see if the public responds.

  5. Gary -
    It's not just for entertainment purposes - a lot of people see the two that way. You'll see people say that the "fight" went back a century before and that Hayek and Keynes are just standard bearers for Malthus and Say.

    I've had better ideas (perhaps not a better product) and I publish them on here all the time.


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