The Austrian School: A Window to the soul of Droopy

[Guest]

What is the Austrian School?

Those of you who have read -- or skimmed -- Droopy's posts have no doubt noticed frequent appeal to "the Austrian School". But what is the Austrian School, anyway? Perhaps, you've thought to yourself, the Austrian School is like the Chicago School, a dominant, conservative way of doing economic research that is loved by the Right and hated by the Left. If you've thought this, then you have thought wrongly.

Right or wrong, the "Chicago School" has had an important if not revolutionizing influence on economics as a science. Milton Friedman became nearly as important as John Maynard Keynes by the end of his career. The Austrian School, on the other hand, is more of a crank tank than an academic institution and it in fact, doesn't even do real economics. It would be virtually impossible to graduate with a degree in economics from anywhere, and not learn a little about the Chicago School, while on the other hand, it would be very easy to find oneself steeped in graduate studies having never heard of the Austrian School. In fact, finding solid critiques of the Austrian School is even difficult because much like FARMS, they are simply ignored.

Like FARMS, is the Austrian School a cult?

Yes.

The Austrian School idolizes Von Mises, Ayn Rand, and "freedom-loving" rhetoric. But it isn't just the personality worship that makes them a cult, in fact, that's all fluff really. The real issue is that they don't do real economics. And I'm serious about that. Von Mises never drew a graph in his life. He and his followers rejected calculus and statistics as applied to economics, they rejected the utility function, indifference curves, all the tools taught at every university in the United States and I imagine Europe. Essentially, they believe math is a tool of the devil.

So what kind of Economics does the Austrian School do?

Yet all too large a fraction of Austrian research has not been in economics at all, but rather in meta-economics: philosophy, methodology, and history of thought.

This is a must-read: http://econfaculty.gmu.edu/bcaplan/whyaust.htm

Here are some paper titles from the Von Mises Institute:

What is wrong with Econometrics?
Econometrics: A Strange Process
Any Good Defense of Econometrics?
The Trouble with Economic Statistics

This is a must-read: http://econfaculty.gmu.edu/bcaplan/whyaust.htm

I'll leave it to the reader to find the many dismissals and arguments against math and stats from Von Mises himself.

So how do such very different conservative schools of economics get so tangled together?

By the media, survivalist militias, and probably now and again by "the enemy of my enemy is my friend" logic, a common cause against government intervention. But let's be clear: You will find no substantial references to Austrian thinkers in papers published by Chicago faculty. Paul Samuelson flippantly dismissed the Austrian School, and the Austrian school has attacked not only the Left, but the Chicago School at times. Keynes invented macroeconomics to make his arguments for government policy and Friedman came along and turned Keynes's own tools against him. The interesting thing here is the acceptance of Keynes's theoretical framework to allow their disagreements to be drawn out put Keynes and Friedman on opposite sides of the same coin, whereas Austrian theories trade in a foreign currency altogether.

Understanding the Austrian School operates in a world of its own, can this help us understand Droopy?

Yes! Droopy, like many self-taught poli-sci enthusiasts discovered Austrian theory because the heavy "freedom" rhetoric has been picked up by right-wing pundits and popularized in media. While there is some heavy obscurity in Von Mises's writing, Austrian economics would tend to be more accessible given there is no serious math, statistics, or empirical research involved.

More importantly, it may help some of us figure out better where Droopy is coming from in the future. For instance, in the Sowell-bridge episode, one couldn't understand how Droopy could be so dense and not even accept the logical possibility of the government creating wealth. When Sowell and Austrians make their arguments against government, the rhetoric might be the same or sound similar, but the driving ideas behind what they preach are very different. No one who has taken a basic econ course would dispute that the government can in theory create wealth. But, Droopy has not taken a basic econ course, and has indoctrinated himself with "the Austrian School." It's altogether possible that someone from that grand tradition did argue that it's logically impossible for Government to create wealth. There are several arguments and statements I've read by disciples of Mises that sound very similar to things Droopy has said and make me think that it's possible the Austrian School does indeed take such a position, but I have yet to find the smoking gun. I have to admit, I'm downright curious about this. I just don't want to spend too much time reading their stuff as it's kind of like reading what FARMS publishes.

[_Doctor Scratch]

This sheds a lot of light on the nature of FARMS, Dean Robbers--thank you for posting this. I have a question for you, though: if the rhetoric of "freedom" is what makes the Austrian School palatable for dilettantes, what is the equivalent rhetorical gambit that makes the FARMS Review appealing to lower-tier Mopologists?

[_Pollypinks]

Is this why, after attaining an economics degree, my father became a leftist? On another post they were revering the spirituality of Reagan. Oh puleeze. Was triple, or quadruple the national debt. Really spiritual, dude.

[_Gadianton]

This sheds a lot of light on the nature of FARMS, Dean Robbers--thank you for posting this. I have a question for you, though: if the rhetoric of "freedom" is what makes the Austrian School palatable for dilettantes, what is the equivalent rhetorical gambit that makes the FARMS Review appealing to lower-tier Mopologists?

Hi there Professor. I'm hoping that the association of the obvious crank tank called FARMS can help readers of this thread understand the Austrian School. I hope Droopy is still in a position to learn that his life's pursuit of an economics education is for naught, and that he should pick up -- as I have recommended in the past -- Nicholson's text on microeconomics and go from there.

But, if you must know, then the equivalent rhetoric for FARMS is that of hubris. While the Austrian School may be guilty of hubris, hubris isn't explicitly their rhetorical gambit. FARMS, however, has virtually made a career out of boasting their own perfections, their degrees, their perfection of grammar and punctuation in contrast to critics, and the "back-slapping" promotion -- you recall Kishkuman's research on the Yale conference where the hosts of the conference were confused by the self-congratulation and reverence toward themselves by the apologists. So the junior tier is drawn to the promises of superiority that FARMS offers. They read books published by "Ohxfohrd" press rather than the drivel of those "Folk Mormons" consume at Deseret Book. Indeed, as the 21st century Nobel-prize nominee Bob Bobberson put it, the apologists peruse the fora of critics in search of a mistake the same way the Old Man once navigated his skiff in search of a fish.

[_Doctor Scratch]

Huh. That's a fascinating analysis, Dr. Robbers. It may help explain the recent exodus of The Nehor, who declared that his departure from the board was influenced at least in part by the horrible embarrassment that was dealt to DCP by our star graduate student, Mr. Stak.

[_Gadianton]

Is this why, after attaining an economics degree, my father became a leftist? On another post they were revering the spirituality of Reagan. Oh puleeze. Was triple, or quadruple the national debt. Really spiritual, dude.

Hmmm. That's tough to say. Consider that upon obtaining an economics degree, one will likely have heard nothing of the "Austrian School" save the calculation argument Mises popularized that exists as a footnote in most econ 101 texts. So I have my doubts that his leftism could have been a reaction to the Austrian School because like FARMS, it's a fringe institution with no credibility in the real world.

Now did he get sick of right-wing rhetoric in general? Only he can answer that. I can tell you that at BYU, oddly enough, the econ professors were anything but spiritual, in fact, they boasted of having the lowest spirituality ratings of any school at the university. I never recall hearing right-wing propoganda from any of them even though most were conservative. Interestingly, what seemed to be the most intense worry from them was their own intelligence. Finding quirky, novel insights that demonstrated a "slacker-genius" aptitude separated the wheat from the tares for them. The book/movie Freakonomics probably defines the core of Chicago economics better than any praises to Reagan. The vulgar masses that Sowell appeals to get the impression that neoclassical economics is about a love of freedom, but it's not, it's a love for cleverness, cynical insights, bizarre micro-models and mind-twisting game theories. And whoever does the least work, wins.

[_Tarski]

I had suspected this was the case since I couldn't find any serious looking actual economics publications that seemed to have anything directly to do with the so called Austrian school. Nothing but philosophical rants (minus the analytical substance). Much of it just looks like so much more anti-knowledge catalyzed by the internet.

This would neatly explain why Droopy has never put forward anything remotely analytical -let alone an equation or even some rigorously analyzed economic data. It just doesn't exist in his wacky sphere.
It is always the same with him; a rant against the media and the education system (again, sans any specific or argumentation).
The number of logical steps he takes is always somewhere between zero and one.

CNN is pablum I tell ya! The universities are liberal bastions and professors are boneheads that are "out of the loop".
Nice argument! LOL

It is about time to point out that anyone who doesn't know what nonlinear functional analysis is or anyone who hasn't a clue about optimal control theory or even basic multivariable calculus, hasn't any business pretending to be an expert in economics. Such a person should show a bit of humility and a particle of self-doubt.
Of course, I can't claim to be up on graduate level economics but I am sure I have massively more of the prerequisites than Droopy and a much better sense of intellectual rigor.
When I trundle over to the economics department to satisfy my curiosity about some bit of economics I have heard about, my sources there don't have to first teach me mathematics. They can jump right into the grown up version and not worry that an integral sign will make me cry. On the other hand, they do have to worry that I might spot incorrect mathematics or a flawed derivation.
The point is not that I am someone to look to for economic insight - in fact I have little faith that I can sort things out. It is just much worse for Droopy and yet he has all the certainty in the world.

Actually, I am sort of sick of this Droopy fellow marching around acting like he is the one with a real education. As far as I can see, he still thinks an education is just a question of vocabulary, rhetoric, and a mastery of ideological talking points.
He just wants an ever firmer position in the Misesian echo chamber. To that end he just rehearses his lines.

It looks to me that he has exactly zero chance of progressing beyond this since he is held back by an incredible amount of unjustified certainty and arrogance.
Oh well.

[_Simon Belmont]

What's the problem with conservatism, Gadianton? The way I see it, for the most part people should live within their means and reap what they sow, with a few exceptions (like people who are mentally/physically incapable). It isn't up to the government to use taxpayer money to pay for things like earmarks, especially when we can't afford it. Look at the current situation in the U.S. with skyrocketing debt. I'm not blaming any president for it, of course, but the current administration wants to continue to spend more money we simply don't have.

Now, don't get me wrong, there are a lot of democratic ideals I like as well, and I wish we could afford more social services sometimes. I am not a fan of Glenn Beck, and I am not a "tea partier" or far right-winger. Just a conservative.

[_Gadianton]

Huh. Simon, old friend and one-time colleague, where did I criticize conservativism?

Did you read my post?

Do you disagree with my thoughts on the Austrian School? Do you think I was unfair with Chicago?

[_Tarski]

What's the problem with conservatism, Gadianton? .

??
Umm, I don't think he ....
oh never mind.