Austrian theory is NOT a study based on evidence. That's exactly the problem with it?

[tmosley]

Well, I find it ironic that you can make very good predictions with Austrian economics, yet Austrian economics is not a predictive science per se. But I'll have to take issue with things you've said tmosley...


Yes, Austrians have done this, with their humans act axiom


Well, yeah I suppose Austrians do this


I suppose they would if they could, but there are not reliable ways to test (in the way most people are thinking) economic hypotheses in the real world. Which is why they derive their theory deductively... so if logical deduction is a certain way of testing things, well then yes your statement is still correct so far.


But it's kind hard to "prove" things scientifically like this, much less things about economy. One way Austrian economists prove their theory is by logical reasoning. If their logical reasoning is completely sound, and their premises that they are working with are correct, then their conclusions would be apodictically certain, as they say...


That's the thing, those predictions are not very testable. It's difficult to do scientifically sound expirements in economics, if not completely impossible.


Austrian economists use one scientific methodology like you just described, but it is not empiricist--it is logical. So you're not wrong here, but there is a certain nuance that needs to be acknowledged.

It's logical in the same way astronomy is logical. You don't have to create a controlled experiment to gather relevant data. You observe ongoing "reactions" out in the real world (or in the case of Second Life, or any of the other MMOs with economies, the virtual world), and you can make predictions about what will happen according to your theory. Just like an astronomer observes a star, and notices that it is a certain size and a certain temperature, they are able to predict whether it will explode in a supernova, collapse into a black hole, or become a neutron star, etc. They may not be able to predict exactly when that would happen, but they can tell you how things are going to play out. Austrian economics is the same, or at least, very similar.

Individual people can be unpredictable, but large aggregates of people will always act in a predictable manner, minus the intervention of a few (ie government).

 

[Paulitician]

Astronomy is not similar to Austrian economics. Astronomy is almost entirely based on physics, Austrian economics is not.

Second, I think you're confused about austrian economics as an particular economic science, it's position on empiricism and predictability etc. You might want to listen to lectures about the topic from FEE.org or Mises.org, or something, or read a book about it.

 

[tmosley]

Astronomy is not similar to Austrian economics. Astronomy is almost entirely based on physics, Austrian economics is not.

Second, I think you're confused about austrian economics as an particular economic science, it's position on empiricism and predictability etc. You might want to listen to lectures about the topic from FEE.org or Mises.org, or something, or read a book about it.

If it walks like a duck, quacks like a duck, and swims like a duck, it doesn't really matter if it calls itself a chicken, now does it?

You can't conduct a direct experiment in astronomy, you can only observe ongoing phenomena, exactly like economics.

In fact, economics now has a one up on astronomy in that virtual economies can be created and experimented upon (using real humans as subjects), something that astronomy can't do, but can only simulate.

*Edit* And yes, I realize that one is based on physics and the other is not. That is why it is called an "analogy". If both were based on physics, they would be the same discipline, which wouldn't make much sense at all.

 

[s burgess]

i cant post any comments on the you tube stink.

 

[Nanerbeet]

Just reply and say an economy based on empiricism cannot work because once the data has been applied to the model, the outcome is changed and the data is no longer relavent.


Another way to think of this-- if everyone could predict which way the stock market was going to move, would it still move in that direction?

 

[tmosley]

Just reply and say an economy based on empiricism cannot work because once the data has been applied to the model, the outcome is changed and the data is no longer relavent.


Another way to think of this-- if everyone could predict which way the stock market was going to move, would it still move in that direction?

You can't predict a time (this would require extremely advanced chaos theory, and would probably hit up against quantum uncertainty--and then the Butterfly Effect, making such predictions impossible), only a final outcome. Crashes that were predicted and seen as "inevitable" would just happen much faster if everyone knew about it, as everyone would pile onto a downturn. It wouldn't predict individual stocks, as those prices are generally determined more by the fundamentals than by mass psychology (over the long run).