Austrian Economics on Morning Ireland
This post was written by Karl Whelan
I’m pretty sure many of our readers who missed it will get some entertainment from the archived version of Jill Kirby’s interview on Morning Ireland. For those who don’t know, Jill is the resident Austrian macroeconomic theorist at the Irish edition of the Sunday Times (double jobs as their personal finance expert, apparently.) Late in the clip, a highly puzzled Tim Harford of Undercover Economist fame struggles to cope with the full breadth of Jill’s Austrian vision.
March 20th, 2009 at 9:52 pm
Tim Harford, like many others, struggles to comprehend the full breadth of Jill’s arguments because he probably isn’t familiar with it.
Suffice to say I haven’t seen a single decent critique of the Austrian Business Cycle Theory. Krugman and DeLong’s arguments against it contain so many strawmen it’s laughable. In my opinion they fail to get it becuase they have no conception of capital theory, and as such characaturise the ABCT as a problem of “overinvestment” In fact they fail to demonstrate they’ve read anything by Mises or Hayek.
DeLong admitted he was introduced to the work of Ludwig von Mises by Joe the Plumber. Greg Mankiw admitted he had never read Human Action.
For more on the ABCT see: http://mises.org/story/672
March 20th, 2009 at 10:06 pm
And this may sould like a stupid question, but are there any Austrians, aka goldbugs, in UCD or TCD?
March 20th, 2009 at 10:52 pm
Harford came across as a very polite man, which is to his credit.
March 21st, 2009 at 12:40 am
I have always been a little wary of the Austrian/Alabaman school of economics as espoused by mises.org
It strikes me that their main concern seems to be the federal reserve and the ‘creation of money’. Perhaps this is why they are so popular with goldbugs and tin-foilers everywhere, who crave a return to the gold standard. (Although from what I read in place like Kitco.com their motivation generally seems to be personal profit rather than the betterment of society.)
The world has moved on from hard currencies. True, the current financial crisis may not have been possible if the gold standard still existed, but so much else would not have been possible either. Also, the solutions to the current crisis (QE) is only possible without a commodity backed currency.
To paraphrase Homer Simpson. “Fiat currency. The cause of, and solution to, all of life’s problems”
Wonder how the Austrian’s will react if there is any legs in this story, that the UN is recommending an end to the $ as the world reserve currency.
http://www.reuters.com/article/newsOne/idUSTRE52H2CY20090318
March 21st, 2009 at 1:11 am
“It strikes me that their main concern seems to be the federal reserve and the ‘creation of money’. Perhaps this is why they are so popular with goldbugs and tin-foilers everywhere, who crave a return to the gold standard. (Although from what I read in place like Kitco.com their motivation generally seems to be personal profit rather than the betterment of society.)”
Lorcan,
Please don’t fall into the stereotypical trap of marginalising the school of economics as “tin-foil hat”. The main concern of the Misesians is to advance the school’s teachings and to bring them into the public domain. The Mises Institute does not accept donations from corporations or the government - they are certainly not in it for the money.
March 21st, 2009 at 1:39 am
Matt, sorry if my post lacked clarity.
The ‘they’ I was referring to in the line “their motivation generally seems to be personal profit rather than the betterment of society.” were the gold-bugs and tinfoilers, not the Mises institute.
March 21st, 2009 at 1:52 am
Ahh understood.
March 21st, 2009 at 12:34 pm
Well regardless of the opinion of the Austrians on this blog, I think we know who was right on predicting the crisis
Peter Schiff vs Art Laffer - 2006
http://www.youtube.com/watch?v=g-x9hgx3tTY
Needless to say Peter Schiff is not predicting good times ahead for the US - Full Lecture on why meltdown should have surprised no one
http://www.youtube.com/watch?v=EgMclXX5msc&feature=player_embedded
March 21st, 2009 at 1:17 pm
I’m impressed by this interview. I hope Jill will come with us on our next trip to the Mises Institute!
March 21st, 2009 at 1:19 pm
“True, the current financial crisis may not have been possible if the gold standard still existed, but so much else would not have been possible either.”
Such as?
March 22nd, 2009 at 12:28 am
Austrian economics comes under a lot of fire, but in their defence the proponents of it were some of the most vocal critics of the bubble we were going into - and furthermore recognised it as that.
March 22nd, 2009 at 11:22 am
Ah come on, you didn’t need to be an Austrian to see a big property bubble in the US (and elsewhere).
March 22nd, 2009 at 10:17 pm
*fondly remembers famous last words*:
“The problem of depression-prevention has been
solved, for all practical purposes.” –Robert Lucas, 2003
March 23rd, 2009 at 9:10 am
The EconLib blog at http://econlog.econlib.org/ often has posts on specific issues that cover the various economic viewpoints, including the Austrians. It’s therefore very useful. Giving the fundamental assumptions underlying an analysis or point-of-view is sadly rather rare
March 23rd, 2009 at 9:46 am
The Austrians are dedicated to preventing governments from becoming Ponzi schemes via fiat. They have no love for gold or any barbrous relic. Commodities could easily form backing for a currency. The whole point of a currency, an HONEST currency, is that it can be naturally and consensually exchanged. Why do pundits and so called economists find this hard to understand? Ahhh, most of them are employed by governments!
March 23rd, 2009 at 9:50 am
I must apologize if I may have implied that economists have prostituted their state subsidized education in order to mislead the gullible and ignorant into a belief that a government can create real currency.
I meant to expressly indict them!