Reimu

I find it funny when people say things like "Hayek isn't worthy of being part of the Austrian school of economics" because he didn't have an anarcho-capitalist political philosophy—as if he wasn't pivotal in developing Austrian school's capital theory.

🚨 HOT TAKE: Piero Sraffa wrecked naïve Austrian business cycle theory (ABCT) — and that should make internet Austrians nervous. And here’s the twist: Sraffa pulled this off in the most Austrian way imaginable — no regressions, no datasets, just pure theory. From the armchair. One version of the Austrian story runs like this: lower interest rates → longer, more “roundabout” production → boom → bust. Clean. Intuitive. Almost geometric. Sraffa’s quibble: there is no monotonic relationship between the interest rate and “capital intensity.” The ordering of processes by their "roundaboutness" fails to be an ordering at all. The observation is theoretically devastating. The supposed one-dimensional ordering of capital structures collapses. Translation: if your ABCT relies on “cheap credit → longer production chains” as a general law, it’s already dead.

@dab_chick Wow!

@StealthTax Yes, he is very classical-oriented. So he uses objective costs.

@EconReimu Should revisit this but all his takes come from spurning methodological individualism and subjective value. He uses the method of the British classicals doesn’t he? Their S&D concept and producer centric.

George Reisman talks about this

@austrosillyism Reisman rejects opportunity cost outright

@EconReimu Herbert Davenport does too, and that not all instances of opportunity cost involve monetary costs and profit (say pursuing a peach when you could’ve pursued a banana) so foregone opportunities is better terminology

@austrosillyism I guess that means that the typical f(K,L) function implies that there are increasing returns to land.

@austrosillyism Rare inclusion of land

I found something strange written on the wall

@MainstreamViews photo from last year

Former French Prime Minister Édouard Philippe, the leading centrist candidate for president, before and after shaving his beard

@burnthalies Some of Peter Janich's works are translated

Not a single German philosopher Hoppe references in ES&AM is translated into English. Thanks for that i guess.

History of Economic Analysis (p. 209)

Schumpeter criticized to the word 'econometrics' "on philological grounds" because "it ought to be either Ecometrics or Economometrics."

Me after reading the "Preliminary Observations" of Mises' Ultimate Foundation of Economic science in 2019.

@glyphikon What does "Kantian subjectivist conception of capital" mean, and when did I attribute it to Menger? The sources of two definitions I attributed to Menger: capital goods came from his 'Principles', and capital came from "Zur Theorie des Kapitals."

@EconReimu You're making the erroneous leap from assertions about the subjectivity of evaluation to a Kantian subjectivist conception of capital which Menger never subscribed to.

It was precisely due to Carl Menger NOT being a "subjectivist" that the Austrians were able to develop the only known coherent capital/production theory. And it is precisely due to Neoclassicals being "subjectivists" that their capital theory ultimately degenerated into revolving around the comically infamous homogenous "K" variable.

@glyphikon I agree, you need both to have a complete analysis: capital goods (heterogeneous, used in production), and capital (homogeneous monetary value, used for calculation).

@EconReimu Just focussing on the latter at the expense of the former leads to the mistaken view that economics is primarily a calculation problem when that is only just one, albeit important, aspect of the overall coordination problem to be explained.

@glyphikon In "Zur Theorie des Kapitals" Menger argued that capital (monetary value of factors of prod—not to be confused with capital goods) is homogeneous. This is necessary for economic calculation The NC problem is homogenizing the physical capital goods, nothing to do with subjectivism

@glyphikon Menger's definition of capital goods is certainly more subjective. Menger defines capital goods according to the subjective intentions of its owners (for consumption or production?) Neoclassicals differ, but frequently define capital goods as durable goods—not subjective.

@Reformed_Knight Hello! I had not realized you returned

@EconReimu Haven't seen you in years. Hello again

LUDWIG VON MISES MENTIONNED 💪💪💪💪🇱🇻🇱🇻🇱🇻🇱🇻🇱🇻🇱🇻