Austrian Realists

I realized it had been over a month since I criticized other free market economists, and hence wrote this article.

Note that the picture for the article is a reference to Gene's book. I imagine some people here would have assumed the so-and-so's down at the Mises Institute would be far too petty to promote Gene's book after all the goings-on. Maybe Gene will sing us some lines from a Les Mis song:

Damned if I'll live in the debt of a bigot!
Damned if I'll yield at the end of the chase.
I am the blog and the blog is not mocked
I'll spit his pity right back in his face
Oh how on earth can this be?
It is either Ron Paul or Gene C.!

How can I now allow this man
To hold dominion over me?
This desperate man whom I have baited
He gave me my book. He gave me sales.
I should have perished by his hand
It was his right.
It was my right to mock as well
Instead I live... but live in hell.

And my thoughts fly apart
Can this man be believed?
Shall his sins be forgiven?
Shall his crimes be reprieved?

And must I now begin to doubt,
Who never doubted all these months?
My heart is stone and still it trembles
The world I have known is lost in shadow.
Is he from heaven or from hell?
And does he know
That granting me my book today
This man has killed me even so?

BTW if you have no idea what I am alluding to, you really need to see Les Mis. Far be it from me to criticize any movie involving Liam Neeson, but it doesn't hold a candle to the stage production.


  1. "Note that the picture for the article is a reference to Gene's book."

    Well, they did lift my friend's graphics and use them without credit, yes.

    "I imagine some people here would have assumed the so-and-so's down at the Mises Institute would be far too petty to promote Gene's book"

    How does this unattributed graphic with no text and no link to anything promote my book?

    In any case, they do promote it still, as well they might -- every penny of sales goes to LVMI, not to me. (And I'm not saying they're stealing from me or anything -- I voluntarily signed a contract calling for one up front payment for writing the book.)

  2. Good job on citing Caplan's attempt to deal with the issue in the QJAE article I linked back then, so as to give a fair representation of Caplan's position and thus not engage in strawmanning, which you are meticulous about avoiding in all discussions. [/sarcasm overload]

  3. Silas,

    I want to make sure your understanding of my treachery is accurate. When I'm writing a piece, I actually don't think, "Hmm, let me check the Internet and see what Silas Barta has had to say on this subject."

    I don't know which QJAE piece you are talking about. If you want to say I'm lazy, fine. But I'm not purposely ignoring crushing arguments. Caplan's blog post--by itself--seemed dumb to me, so I ripped it on

    Gene, I think your post may even be crazier than Silas' on this one. No further comment.

  4. No, Bob, if you're going to call me crazy, please explain.

  5. Silas, check this out: Caplan also failed to cite his QJAE article in the blog post! He, too, is "strawmanning" his own position!

  6. Dr. Murray Tyson7:38 PM


    They may be actually trying to stick it to Gene in a very subtle way. Since Gene is not getting anymore money from the book, waving the cover is like waving a red flag at a bull.

    They may just want to see if Gene, snorts and charges.

  7. Heh heh you have redeemed yourself with your Silas riposte, Gene...

    Anyway, I am saying that I saw the graphic they used on my article, and thought, "Oh that's cool, they went with the Economics for Real People angle. I'm glad they apparently aren't holding a grudge."

    And so when you describe that as lifting your friend's graphics without credit--even though they are "lifting" the graphic from a book they published--that just seemed crazy.

    If you want to go back and check other articles, feel free, but I don't think they usually put a book link right near the title, except maybe if it's David Gordon reviewing a book. So it wouldn't have really made sense to put an actual picture of Economics for Real People there. (Plus, they would have been worried that I would be mad at you stealing my thunder.) And obviously at the bottom they put my book because I wrote the article.

    If you are just being playful to respond to my dumb post, OK that's fine. But if you were actually offended that they ripped off your friend when you clicked on the article, yes I think that's crazy. I don't know how to explain if you don't think so.

  8. Bob, please don't feign ignorance on this one. You posted about Caplan's blog post HERE. On this blog. LOOK!

    Hey, what's that? It looks like you found two Caplan articles I described. Then, it looks I quote from one of them!

    You know which QJAE article I'm talking about because you linked it yourself in a discussion of the very same blog post, on the very same blog.

    Now, cough up an apology, and tag on some gold plating.

  9. Well, Bob, you need some history here to understand my chagrin. My mate Robbie D. did the cover of EFRP version 1 free of charge. Then LVMI contacted him to do the cover for V. 2. Note: LVMI contacted him! He worked on a new cover for a couple of months, at which point, with no explanation, LVMI told him, "We'll do this ourselves," totally wasting his months of work. Was it that my friend's efforts were no good? No, THEN, they came out with a cover which was only a minor modification of my friend's original effort! I sent several e-mails to Rockwell trying to get an explanation of why they had treated my friend so shabbily, but was just brushed off, as though it was none of my business.

    But Bob, you know all about this, how Rockwell will suddenly and inexplicably reject some piece of work, and then absolutely refuse to give any explanation as to why he has done so. Haven't you experienced this rude and cavalier treatment yourself, if I am not mistaken?

  10. Oh, and note: LVMI certainly never did anything to acquire a right to use my friend's graphic design again and again without paying him or even acknowledging his input.

  11. Silas, what the H*ll are you on about here? Caplan writes a blog post. Murphy responds to it. You complain, "Yes, Bob, but you failed to respond to some other piece of writing Caplan produced at some other time!"

    So what? If, in fact, Caplan had noted, in the blog post, "Of course, to understand my view here, you must read my earlier piece, XXXX," THEN Bob would be at fault. But Caplan himself clearly felt his post stood on its own, so how in the world is Bob at fault for treating it as such?

  12. Ha ha, this is hilarious Silas. I never read that last post you put in that thread. OK, so assume for a moment that I am not lying to you. Go and reread the thread. You refer (without linking) to some Caplan article, I then list two contenders and ask you which one it is, and until your last post--which I never read--you don't spell out what his response is. Everything you say up till that point, I find "goofy."

    So if anyone needs to cough up an apology, it isn't me.

    And yet another example of how I am dropping threads because I didn't feel like scrolling down.

    Tell you what, Silas: If you get the code from Aguanomics, and the code from Crash Landing, and can figure out what I need to paste in here to copy Zetland's Recent Comments feature, I will make a blog post admitting that you are really smart and that your critiques are sometimes difficult for me to counter, so I go with a joke and hope the crowd doesn't notice.


  13. Silas,

    Uh, now that I've read the quote, he didn't add anything that you didn't summarize, and so I repeat that that is just begging the question.

    You can't optimize if you don't know what will happen in the "other" realization.

    E.g. suppose you're trying to come up with the optimal blackjack strategy. You tell the player what to do, based on the cards he sees, and the history of the deck up till that point.

    Oh but there's one hitch: You say that if the dealer gets three sevens, then the player loses an extra amount of money.

    "How much money?" you ask.

    "Oh, some money, but I'm not sure. Call it x."

    Well, now you can't possibly come up with an optimal strategy. You need to know what happens under every outcome, or else you can't even get going.

  14. OK Gene, first, I forgot about the history of your cover--you told me about this stuff when it happened--and so I shouldn't have made a joke about it. I also heard the explanation from the other side, and no I'm not going to discuss it here because I don't think people expect me to post conversations on a blog.

    And by the same token, no I'm not going to talk smack about people at the Institute. Jeez...I'm glad I didn't tell you I was worried about my erectile dysfunction.


  15. @Gene: Caplan's post stood on its own, yes, but part of the QJAE article I cited was exactly the kind of clarification that would have answered Bob's challenges. Since Caplan can't be expected to answer every challenge that comes up, it's unreasonable to restrict the debate to only the general challenge he made in his post. Come on, this is basic stuff.

    @Bob: Alright, I guess I'm stupid enough to believe you wouldn't read your own blog's discussion of that very same post or try to get any more information whatsoever about Caplan's position before writing a whole article about it. My stupidity extends to thinking that "Silas expects Bob to read all of Silas's stuff before writing anything" was a fair characterization of my comment and thus requires no gold-plated apology.

    I'm ALSO stupid enough to deem your perpetual strawmanning of others' positions to be a valid form of argumentation.

  16. Silas,

    So, you yelled at me for purposely ignoring something, then realize I hadn't seen it...and still manage to work in some more insults. Sweet.

  17. Now that I'm all riled up by you two, I have the temerity to ask:

    Silas, why do you think it is that you have been banned from a bunch of sites? Is it just that there are that many freaking morons walking around?

    Or is it possible that you act like a jerk on the Internet?

  18. "They may just want to see if Gene, snorts and charges"

    Dr. Murray, you win the award for worst use of a comma on Crash Landing this year!

  19. It's more tempting to be a jerk when others are so brazen with their screwups.

  20. Dr. Murray Tyson11:31 AM


    Dr. Murray, you win the award for worst use of a comma on Crash Landing this year!

    What do you want good punctuation, or extremely insightful comments?


    For your erectile dysfunction, I understand watermelons work. 6 fullcups a day, according to an LRC link.

  21. Silas,

    This isn't about cap & trade, so by all means let's continue with the fun. Please explain to me how Caplan provided a response that I (either through malice or laziness) ignored.

    To summarize my take on this: Kirzner says, "Mainstream attempts to model uncertainty beg the question. The models still assume that agents know every possible outcome, and know the *correct* probability distribution of those outcomes."

    In response, Caplan says, "No, you can list every outcome you have thought of, assign probability mass to each of those, and then assign the remaining mass to a category of 'Other.' Then go ahead and use Bayesian techniques."

    So I am saying this is nonsense. You can't have an agent maximize a utility function with "other" as an outcome, since you don't know what the payoff is in those outcomes.

    Further, there is no reason to suppose that your probability assignments to the other outcomes are correct, since you DON'T KNOW what the "other" consists of.

    In conclusion, Caplan's suggestion is absurd. Kirzner is untouched.

    Now where have I gone wrong, Silas?

  22. Oh a clarification, Silas: Yes I get that you can do a Bayesian updating on list of outcomes based on new information.

    But what I'm saying is that this insight doesn't all of a sudden vindicate the neoclassical approach versus the Austrian approach. Both sides know that people think of things that could happen, and then hedge themselves in case they are missing something.

    But it doesn't add anything to formally model this as "the agent assigns a probability distribution with some mass on 'other.'"

    In order to use a neoclassical model the agents have to know what the payoffs are--and they have to be RIGHT in their beliefs--and the ex ante beliefs have to be right too, at least in most models I've seen.

    I.e. you can have agents learn more information over time about what a random variable will be at t=100 or something, but in order to correctly process the new information their initial understanding of the model had to be correct.

    So it's basically like the Austrians are saying, "Jim chose the apple over the orange because it gave him more utility," and then Caplan says, "I prefer to say it's because the apple gave him 13 utils while the orange gave 3.7."

    That by itself doesn't add anything, and if you start adding assumptions such that the formal approach *does* give you more than the verbal, you've left reality.

    Same thing here. Caplan's suggestion doesn't improve on Kirzner's approach, unless you start slapping on false assumptions that then yield false predictions.

  23. Bob: Slow down. My point is that you didn't link Caplan's relevant articles on this, not that your response itself is in error. I don't see why you don't understand that by now.

    My criticism is that you only showed a small portion of Caplan's arguments that are relevant to what you talked about in the article. You knew of the two QJAE articles, even if you didn't see my quote from one of them (which I think is a lie because of the high likelihood that you took a peek at the blog discussion before blowing it up into an article).

    To put it succinctly:

    Caplan argues A and B.

    You argue R(A) and R(B) (response to A and response to B).

    A few years ago, Caplan wrote R(R(A)) and R(R(B)).

    You fail to inform readers of the existence of that paper, so that they could better understand Caplan's position beyond his little blog post, even though you knew about the papers and linked them yourself in an earlier discussion of the issue.

    Come on, let's hear the rationalizations, I think they can get pretty funny.

  24. Btw, do you still believe all that garbage about "case probability doesn't exist", even though we have prediction markets now?

  25. Come on, let's hear the rationalizations, I think they can get pretty funny.

    Let me guess this straight, Silas: You're mad that I didn't refer to an argument that you yourself agree doesn't affect my critique? And no, believe it or not, I didn't go back and "peek" at the thread because I didn't know there was anything left to peek at. You could say I didn't know that I didn't know the last post in the thread...

    Btw, do you still believe all that garbage about "case probability doesn't exist", even though we have prediction markets now?

    What are you talking about? I have always been critical of that distinction, as deployed by Hoppe. I point out to people that if you want to push it, then even fire insurance companies engage in case probability (since they might lose money).

    In fact, isn't that what we argued about on anti-state? About insurance companies and suicide contracts, or something?

  26. "Btw, do you still believe all that garbage about "case probability doesn't exist", even though we have prediction markets now?"

    Wow, Silas, this is hilarious:
    1) You seem to think philosophical issues in the theory of probability can be resolved in the financial markets!
    2) You regard a theory put forward but one of the gratest 3 or 4 theorists ofprobability in the 20th century (Richard von Mises) as "garbage," in light of your own contributions to probability theory, which include... Oh, wait, I can't think of ny! What are your contributions to this field, again?

    (Of course, R. von Mises's stellar reputation in this field does NOT mean everything he said was correct. But certainly, it ensures that none of it can sensibly be classified as "garbage" by an ignoramus whose has contributed exactly zilch to the discipline in which Mises was an acknoweldged master.)

  27. BTW, my old boss did his PhD in probability theory, and subsequently wrote a textbook on it. The three 20th century theorists he focused on were Keynes, R. von Mises, and Kolmogorov. He took the ideas of Mises very, very seriously,even though in the end he rejected them. This man who spent his whole adult life on probability theory and earned his PhD in the field certainly did not treat Mises's ideas as garbage, as opposed to our present rank amateur who knows so much more than the people who have devoted their lives to this field.


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