If you see a formula offered by an economist, then whatever precedes of follows is nonsense. It is just an argument for rent-seeking one way or another, obscured by incomprehensible mathematical formulae.
Indeed, the Austrian school has no formulae, and apparently only one graph, the supply demand curve.
And the current debate is the ABCT.
Here is a brief critique explicating the difference between Walrus/Jevons and Menger, the Austrian.
But the genius of the Austrian school is praxeology, it studies what people do (not what formulae say they should do) it is grounded in human action. Thus it excels in explanation and prediction.
Feel free to forward this by email to three of your friends.
Indeed, the Austrian school has no formulae, and apparently only one graph, the supply demand curve.
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| imf.org |
And the current debate is the ABCT.
Here is a brief critique explicating the difference between Walrus/Jevons and Menger, the Austrian.
Through finite marginal units, Menger firmly opens the door for the explanation of how various units of goods are being monetarily appraised by acting individuals. If marginal units are scatters of Walrasian equations they do not have to be appraised by entrepreneurs — the mathematical function is in a way doing it for them. It is no surprise that Menger’s heir, Mises, was the one to build a theory of entrepreneurship and demonstrate entrepreneurial roles in solving problems of proper allocations for consumer satisfaction. It also comes as no surprise that Walras’s successors did not see the strength of Mises’s theory of entrepreneurship, because for them the process of optimal allocation can be simply solved by maximization of functions. Mengerian marginal units need to be acted upon and selectively valued. The driving force for their valuation is human choice. Their value is not pre-determined. Walrasian marginal units, on the contrary, are part of valuation equations, therefore they are already appraised once we mathematically describe their economic place. There is no room left for choice. Why bother then with examining the personal valuations of entrepreneurs if marginal units have already assigned roles?I part ways with most of the Austrian school as far as they assign usury a morally neutral rating (although all economic systems, while insisting on economics as a morally neutral science, like mathematics, recognize the term "moral hazard." Has anyone every used the term "moral hazard" in mathematics? Only an ethical system can have a moral hazard.)
But the genius of the Austrian school is praxeology, it studies what people do (not what formulae say they should do) it is grounded in human action. Thus it excels in explanation and prediction.
Feel free to forward this by email to three of your friends.
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