10 thoughts on “Austrian economics vs Keynesianism and Kaletsky”

  1. Posted 06/05/2009 at 11:26 | Permalink

    Monetary expansions are a different matter (and one on which free-market economists disagree in current circumstances: Anthony would not agree with the majority SMPC view, for example). However, Kaletsky seems to believe that he can make the incredibly weak case for fiscal expansions stronger simply by using more and more emotional language. There MIGHT be theoretical conditions under which a fiscal expansion could ease a recession but Kaletsky never lets us into the secret of whether such conditions ever exist. In general, even in a recession, a so-called fiscal expansion is simply a redirection of capital from one sector to another and results in a longer recession.

  2. Posted 06/05/2009 at 11:26 | Permalink

    Monetary expansions are a different matter (and one on which free-market economists disagree in current circumstances: Anthony would not agree with the majority SMPC view, for example). However, Kaletsky seems to believe that he can make the incredibly weak case for fiscal expansions stronger simply by using more and more emotional language. There MIGHT be theoretical conditions under which a fiscal expansion could ease a recession but Kaletsky never lets us into the secret of whether such conditions ever exist. In general, even in a recession, a so-called fiscal expansion is simply a redirection of capital from one sector to another and results in a longer recession.

  3. Posted 06/05/2009 at 13:41 | Permalink

    An interesting detail on Mellon’s supposed liquidationist stance is that the famous quote (”liquidate labour” etc) did not come from the horse’s mouth, but was reported by Hoover in his memoirs, to contrast with what he claimed was his government’s actual, highly-activist approach. ( http://www.pickinglosers.com/blog_entry/bruno/20090418/hoover_austrian_or_interventionist )

    You can spot a group who don’t have much to substantiate their case, if they rely on such flimsy evidence. Rothbard set out at length exactly how interventionist Hoover was. But the Keynesians have never let the facts get in the way of a good story.

  4. Posted 06/05/2009 at 13:41 | Permalink

    An interesting detail on Mellon’s supposed liquidationist stance is that the famous quote (”liquidate labour” etc) did not come from the horse’s mouth, but was reported by Hoover in his memoirs, to contrast with what he claimed was his government’s actual, highly-activist approach. ( http://www.pickinglosers.com/blog_entry/bruno/20090418/hoover_austrian_or_interventionist )

    You can spot a group who don’t have much to substantiate their case, if they rely on such flimsy evidence. Rothbard set out at length exactly how interventionist Hoover was. But the Keynesians have never let the facts get in the way of a good story.

  5. Posted 06/05/2009 at 14:30 | Permalink

    It really doesn’t matter what Andrew Mellon urged Herbert Hoover to do. What matters is what Hoover actually did: promote massive monetary and fiscal expansion, intervene massively in the economy and prevent the necessary and inevitable restructuring. He was savaged for this by FDR, who consequently won the presidential election and proceeded to do everything he had blamed Hoover for but in spades. The recesssion lasted over a decade.

    I suspect that Kaletsky, having been so UTTERLY wrong over the recession during the last 18 months (he denied it would happen, then denied it was happening, and then claimed it would not be very bad), has lost the plot and does not know what to say any more.

  6. Posted 06/05/2009 at 14:30 | Permalink

    It really doesn’t matter what Andrew Mellon urged Herbert Hoover to do. What matters is what Hoover actually did: promote massive monetary and fiscal expansion, intervene massively in the economy and prevent the necessary and inevitable restructuring. He was savaged for this by FDR, who consequently won the presidential election and proceeded to do everything he had blamed Hoover for but in spades. The recesssion lasted over a decade.

    I suspect that Kaletsky, having been so UTTERLY wrong over the recession during the last 18 months (he denied it would happen, then denied it was happening, and then claimed it would not be very bad), has lost the plot and does not know what to say any more.

  7. Posted 06/05/2009 at 15:25 | Permalink

    Kaletsky is a fool, not sure why you bothered with space, or why Murdoch tolerates him.

  8. Posted 06/05/2009 at 15:25 | Permalink

    Kaletsky is a fool, not sure why you bothered with space, or why Murdoch tolerates him.

  9. Posted 07/05/2009 at 14:44 | Permalink

    I find the critique of Keynesian economics as ‘unfalsifiable’ a strange one from an Austrian.

    I think Austrian economics has some interesting insights on money and am no big fan of Kaletsky, although personally would describe myself as a post-Keynesian.

    Interesting article here:

    http://www.gmu.edu/departments/economics/bcaplan/whyaust.htm

    Especially: Mises and Rothbard both emphasize the primacy of economic theory over economic history; theory is derived from the necessary truth of the “axiom of action,” and therefore economic history merely illustrates rather than “tests” economic theory.

  10. Posted 07/05/2009 at 14:44 | Permalink

    I find the critique of Keynesian economics as ‘unfalsifiable’ a strange one from an Austrian.

    I think Austrian economics has some interesting insights on money and am no big fan of Kaletsky, although personally would describe myself as a post-Keynesian.

    Interesting article here:

    http://www.gmu.edu/departments/economics/bcaplan/whyaust.htm

    Especially: Mises and Rothbard both emphasize the primacy of economic theory over economic history; theory is derived from the necessary truth of the “axiom of action,” and therefore economic history merely illustrates rather than “tests” economic theory.

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