Why It Is Hard to Use History to Prove Economic Theory

By -
In short: History is concrete and complex, while economic theory is abstract and simple.

Case in point: I am reading Hyman Minsky's Stabilizing an Unstable Economy at present. I have often seen the contention that events of the 1970s disproved Keynesian economic theory, since we witnessed high inflation and high unemployment at the same time. Minsky thinks these same events, especially the rapid recovery from the downturn in 1974-75, prove Keynes was right.

Well, it keeps me employed, anyway!

Comments

  1. Anonymous1:10 AM

    It is my opinion that the things in the human sphere that we call complex really aren't that complex at all when broken down to their components. Kind of like when you're confronted with a "complex" math problem, often once you dig into it you find that it is really just a series of many simple problems.

    The problem that I see in the social sciences is that perception can often get in the way of what is real, so even the simple can become complex.

    In terms of the concreteness of history, I don't necessarily subscribe to that, because once the event has already occurred, it is no longer concrete and only exists within the minds of those who witnessed/experienced it. Perception once again comes to the fore.

    ReplyDelete
  2. skylien7:33 AM

    That insight is what gives in my point of view the Austrians the 1:0 in this ideological battle, since they at least admit this, whereas the others don't. On the contrary they often even think it makes them pathetic religious fanatics who are just in denial about the "real" empirical facts..

    ReplyDelete
    Replies
    1. gcallah6:10 PM

      "That insight is what gives in my point of view the Austrians the 1:0 in this ideological battle, since they at least admit this, whereas the others don't."

      Some people don't, but many, many non-Austrians understand this.

      Delete
    2. skylien4:24 AM

      Of course I don't want to project this view generally unfairly onto the leading non-Austrian economists. I am quite sure this impression is amplified due to internet discussions in which lots of amateurs (like me) participate...

      Delete

Post a Comment

Popular posts from this blog

Libertarians, My Libertarians!

By -
Cruel to be kind means that I love you . Because, while I think you are mistaken, your hearts are in the right place -- yes, even you, Silas --  unlike some people . This Breitbart fellow (discussed in the link above), by all appearances, deliberately doctored a video of Shirley Sherrod to make her remarks appear virulently racist, when they had, in fact, the opposite import. I heard that at a recent Austrian conference, some folks were talking about "Callahan's conservative turn." While that description is not entirely inaccurate, I must say that a lot of these people who today call themselves conservative give me the heebie-jeebies.
Read more

"Pre-Galilean" Foolishness

By -
 I am currently reading The Master and His Emissary , which appears to be an excellent book. ("Appears" because I don't know the neuroscience literature well enough to say for sure, yet.) But then on page 186 I find: "Asking cognition, however, to give a perspective on the relationship between cognition and affect is like asking astronomer in the pre-Galilean geocentric world, whether, in his opinion, the sun moves round the earth of the earth around the sun. To ask a question alone would be enough to label one as mad." OK, this is garbage. First of all, it should be pre-Copernican, not pre-Galilean. But much worse is that people have seriously been considering heliocentrism for many centuries before Copernicus. Aristarchus had proposed a heliocentric model in the 4th-century BC. It had generally been considered wrong, but not "mad." (And wrong for scientific reasons: Why, for instance, did we not observe stellar parallax?) And when Copernicus propose...
Read more