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  • "The curious task of economics is to demonstrate to men how little they know about what they imagine they can design."

    - F.A. Hayek

What is Economics?

Posted by The_Chef On 3:23 PM 1 comments

What can it do? What is its purpose?

This post by Dr. Pete Boettke over at The Austrian Economists. I will quote some passages for you all.

Hayek argued in the early 1930s that the fate of the economist was to be called upon to address questions of pressing political concern only to have his advice discounted as soon as it was uttered. Why? Because economics as a discipline puts parameters on people's utopias. It gives us primarily "negative" knowledge --- we live in a scarce world, there is no such thing as a free lunch, we cannot assume what it is we hope to prove, ought cannot presuppose can, and can doesn't mean we ought, etc. In the 1980s, Hayek wrote that: "The curious task of economics is to demonstrate to men how little they know about what they imagine they can design."
But ... the politicians do not want to be told what they can and cannot design society to be. They have their views of the perfect state, their utopias. These people will cajole, wheedle, coerce, and kill those that oppose their idealized society. More Boettke:
No answer has yet been given as to why President Bush's bailout package didn't work while his stimulus package will. In fact, when pushed on that question President Obama really just said, we might even need to spend more down the road when this doesn't give us the result we want. And the claim is just that confidence has to be restored to the market and only government can do that.
Ah to steal a term from David Codrea over at War on Guns. The government are the "ONLY ONES" who can save us from this quagmire of capitalism. This is ... for lack of a better term ... bullshit. The government couldn't find its collective (and collectivist) ass with both hands and a map.

I'll summarize what Dr. Boettke thinks are the current problems and why the market is showing that investors are EXTREMELY skittish right now:
  1. "[G]overnment action has produced an uncertain investment environment."
  2. "The rules of ownership and control are unclear, or clear but counter-productive for individual initiative"
  3. "[M]onetary policy guided by the rhetoric of fighting inflation, but fearing deflation has been so loose that long term inflation that threatens the viability of the dollar should be a real concern to investors."
  4. "[F]iscal policy which is so out of control that US public debt will bankrupt the future generations with an astronomical tax burden and/or a monetization that will destroy the currency through hyper-inflation."
Boettke:
...you fail to consider the fiscal arguments of a James Buchanan, the monetary and capital theories of F. A. Hayek, the comparative institutional analysis of law and politics in Ronald Coase, and the monetary and fiscal policy arguments of Milton Friedman. Each of these gentlemen, President Obama, won the Nobel Prize in Economic Science.
But it doesn't stop with just failing to understand or to read the arguments of these intellectual titans. Oh no, you've used your political views of equality and pseudo-Marxist view of ethics and morals to completely discount the very men that have given you a path to SOLVING THE DAMN PROBLEM!
Boettke:
A really radical notion of hope and change might be to get government out of the business of attempting to manage the economy, stop demanding of economics results that it as a discipline cannot produce, and lets depoliticize political economy.
Bravo Dr. Boettke! Ask the politcal class if they'd like a side salad with their entree of Whup-Ass.

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1 Response for the "What is Economics?"

  1. Windy Wilson says:

    I can't think of an appropriate term, but "bullshit" isn't it.
    Bullshit can't be much different from steer manure, which can be and is regularly put on lawns to enhance growth. To continue the analogy, what government provides is not a bailout or a stimulus or even the provision of confidence in the markets they subvert, but the government policies and spending are a broad-band herbicide, causing nothing to grow, or if anything grows, it grows stunted and misshapen.