He writes of Warsh:
"I think he genuinely believes that modern mainstream macroeconomics has ignored Hayek, and if you want to debate that as a factual issue, I think I would rather argue on Warsh's side [me too, obviously - I've been taking this to be a debate about the factual issue, after all].
My problem with framing things as Keynes vs. Hayek or what have you is that it turns what should be an argument over an ideas into an ad hominem. Also, energy that might otherwise go into arguing the merits of idea X instead goes into arguing over whether idea X is what Keynes or Hayek really meant."
I agree with this last sentiment too. And not only does it turn it into an ad hominem but it presupposes that the two men are incompatible which is a really bad way to approach them. This is the Russ Roberts/John Papola "bottom up/top down", "steer markets/set them free" mentality. It's not healthy. I think part of the reason we get into "whether idea X is what Keynes or Hayek really meant" is that a lot of people in this debate our interested in intellectual history. So for us, whether they really meant it matters - not as an alternative to the idea itself but in addition to the idea itself.
But we're never entirely free from these tendencies. I was surprised after all that to see this at the end of Kling's post: "Above all, I saw how impossible it is for top management at firms to have the sort of information and control that is casually assumed in mainstream economic models." I did a double-take when I read that. Normally when we repeat over and over again that information problems are real and we need to take them into account and people don't always have the information they need we get dismissed as being obsessed with market failure as excuses for guv'ment to come in!!! Now we're the ones that assume managers have complete information and control??? Kling here is describing how he came to appreciate Austrian economics. If I had to put a name on worrying about this sort of problem I would call it "information economics" and I would associate it with Joseph Stiglitz, not the Austrian school.
Anyway - like Kling said - focus on the ideas! But then Arnold, if you want us to do that, don't make me do double takes like this again by artificially pitting mainstream economists and Austrian economists against each other when they appreciate the same point!!!
Ask Me Anything
7 hours ago