Critique of Austrian Economics

[Grozny]

I have identified seven serious problems with Austrian economics.

1) As discussed in Section II, Hayek was unclear whether his structure of production represents a yearly flow of goods or a distribution of wealth. Mises and Rothbard, like Hayek, seem to mean one and also the other. Skousen is at least consistent but, unfortunately, he is consistently wrong. He definitely means the amount of goods flowing by every year. This author’s work (1999) is about stock, not supply.

2) As discussed in Section III, Hayek’s triangle is printed sideways and backwards. The former problem can be corrected by rotating the graph but the latter problem is more fundamental. Hayek is speaking from the perspective of the owner of the final product looking back on his costs of production. He is speaking from Marx’s perspective. The perspective that we want is from right now, at time zero, looking forward into the future.

3) As discussed in Section IV, there must be some temporal measure or the Austrian’s incessant references to “lengthening the period of production” would not mean anything at all. Their theory of business cycles depends on credit expansions lengthening the period of production and on the inevitable contraction shortening it. It is impossible to talk about something being lengthened or shortened unless one knows how to measure it.

4) As discussed in Section V, Austrian theory depends entirely too much on the specificity of capital goods. In reality, many companies make products or provide services which are used in all of Hayek’s five stages – and they experience cyclical behavior too. Rothbard was wrong when he said “To the extent that the new money is loaned to consumers rather than businesses, the cycle effects do not occur” (1970, p. 940 footnote).

5) As discussed in Section VI, Garrison’s conceptions of the natural rate of interest is faulty. The Austrians are naïve to cling to this mythical concept. There is no such thing as a natural rate of interest. In any case, credit limits are more important than interest rates. The necessity of a bust following boom times is adequately explained by the transfer of capital from smaller companies to larger ones.

6) In Garrison’s own words: “the [Austrian] theory of the business cycle is a theory of the unsustainable boom. It is not a theory of depression per se. In particular, it does not account for the severity and possible recalcitrance of the depression that may follow on the heels of the bust” (2001, p. 120). In 1930, Hayek could explain how the depression started. In 1936, he could not explain why it still persisted. See Section VII.

7) Austrian economists seem naïve because their belief in a natural interest rate implies an ethical judgment on what is natural or unnatural, their discussion of the inevitable collapse of a credit expansion is typically presented as a sort of morality play and because they advocate an impractical 100% reserve requirement based solely on ethical considerations. See Section VIII.

Seven strikes and you are out! Hayek’s horse fell dead underneath him in 1936. Seventy years later, his followers are still beating that horse saying “Get up! Get up! We have to finish the race!”

Visit my website and click on "Critique of Austrian Economics" for more details.

[Conquer or Die]

I propose the formation of a Mutualist/Austrian subforum and all forum topics in relation to that be relegated to such an area.

[Havet]

I propose the formation of a Mutualist/Austrian subforum and all forum topics in relation to that be relegated to such an area.

Why should mutualist topics be relegated to such area?

[Bud Struggle]

Why should mutualist topics be relegated to such area?

Because they are DULL. :)

[Nolan]

I think there should be an Austrian/Misean subforum. That would clear up the main OI quite a bit.

[LeftSideDown]

I think there should be an Austrian/Misean subforum. That would clear up the main OI quite a bit.

Clear up OI for... what?

[REVLEFT'S BIEGGST MATSER TROL]

Clear up OI for... what?

Basically not discussing the same thing year on year with the newest Mises kid on the block :p

[LeftSideDown]

Basically not discussing the same thing year on year with the newest Mises kid on the block :p

What else would you discuss? Come on, without us you'd have nothing.

[Bud Struggle]

No offense to Mises and those who love him--but he's got an economics with no past and no future. It's not like anyone but a few economics majors in college ever take him seriously in the least bit. I'm sure he's nice and all that--and it's lots of fun making up scenarios where that sort of stuff could be played out--but it ain't gunna happen in real life.

The Communists have a tough enough time making people believe they have a credible future--and they have followers, and have played a pretty important role in the history of the world.

I have no problem with you guys discussing this stuff--but maybe your own sub forum would be the way to go.

[Robert]

Hear here. I'll go further and state that Mises refutation is so important that it deserves its own subforum.

[Nolan]

Clear up OI for... what?

Oh you know... Like anti-communism stuff and not just thread after thread on Mises.

[Skooma Addict]

You guys are the ones who always make the Mises/AE threads though.

[Bud Struggle]

Hear here. I'll go further and state that Mises refutation is so important that it deserves its own subforum.

To modest Comrade for such a great Economist--maybe a forum of their own--I hear the Bogovich forum may be up for grabs!

[Nolan]

Bogovich?

[Bud Struggle]

Bogovich?

He was the ultimate Soviet. He had a site were everyone spoke of "wonderful Soviet peoples, Great and Glorious Soviet Union. Is noble and good to follow great Soviet Father Stalin soon to rise again in hearts of all Russian worker!"

He also wrote Soviet love poetry to his girlfriend.

Now HE was a Commie--hate to say it, but you RevLeft Commies pale in comparison. :D

Sigh, he's long gone.

[REVLEFT'S BIEGGST MATSER TROL]

What else would you discuss? Come on, without us you'd have nothing.

Hopefully concerns about communism from ordinary working people, rather than discussions about how Mises has proved communism fails because of an axiom he thought up.

In my mind, its basically akin to constantly having to debate the validity of racial theory with a load of fascists.

[anticap]

I am reminded of a few quotations, which have been attributed to so many people that I don't suppose we'll ever know who first said them, but they apply here:

"No publicity is bad publicity."

"I don't care what they say about me as long as they spell my name right."

"The only thing worse than being talked about is not being talked about."

I oppose giving the Misesites their own sub-forum, as it would only elevate them. They are a fringe sect even within the broader camp of the thoroughly-discredited and marginalized school of laissez-faire capitalist apologetics; we ought not boost their credibility.

[Dean]

I oppose giving the Misesites their own sub-forum, as it would only elevate them. They are a fringe sect even within the broader camp of the thoroughly-discredited and marginalized school of laissez-faire capitalist apologetics; we ought not boost their credibility.
:laugh: How does it feel walking such a thin line?

[Dean]

He was the ultimate Soviet. He had a site were everyone spoke of "wonderful Soviet peoples, Great and Glorious Soviet Union. Is noble and good to follow great Soviet Father Stalin soon to rise again in hearts of all Russian worker!"

He also wrote Soviet love poetry to his girlfriend.

Now HE was a Commie--hate to say it, but you RevLeft Commies pale in comparison. :D

Sigh, he's long gone.

Actually, hes a mod, and has been for a long time.

I won't say who he is, just that he's a technocrat :-P

[Dermezel]

It's untestable. That's really all you have to say.

http://www.huppi.com/kangaroo/L-aussm.htm

http://homepage.newschool.edu/het/essays/margrev/phases.htm

http://anti-state.com/article.php?article_id=381

That's it. Marxism is testable. The centralization of capital is observed. Not just observable, but observed.

The labor theory of value was empirically proven before Marx by Ricardo. It is to this day confirmed in fields like Industrial Engineering where the various planning programs utilize labor as the primary variable to determining costs.

To this day, in practice, no Industrial Engineer utilizes marginal utility. Only weird marketing groups and right-wing economic theorists use that.

And again, it is untestable. In science or any empirical study in our modern era any untestable theory is basically mysticism.

[Dean]

It's untestable. That's really all you have to say.

http://www.huppi.com/kangaroo/L-aussm.htm

http://homepage.newschool.edu/het/essays/margrev/phases.htm

http://anti-state.com/article.php?article_id=381

That's it. Marxism is testable. The centralization of capital is observed. Not just observable, but observed.

Um, no. The state exists so anything that happens in the market is the fault of the state.

When the state is abolished, capitalists won't be able to pay people to do their bidding. Incentives to provide services for those with purchasing power simply won't exist!

Haven't you been paying attention?! All you have to do is find the state and then bam - theory proven! Markets aren't responsible for anything.

Except for innovation. All progress is market driven. All exploitative profiteering is state-driven. :)

[Dimentio]

I think there should be an Austrian/Misean subforum. That would clear up the main OI quite a bit.

Until most people here gets fed up with Austrians and talking about them... stupid idea.

[Nolan]

Um, no. The state exists so anything that happens in the market is the fault of the state.

When the state is abolished, capitalists won't be able to pay people to do their bidding. Incentives to provide services for those with purchasing power simply won't exist!

Haven't you been paying attention?! All you have to do is find the state and then bam - theory proven! Markets aren't responsible for anything.

Except for innovation. All progress is market driven. All exploitative profiteering is state-driven. :)

Lol exactly. This is the rationale behind 99% of libertarian ideology.

[Zanthorus]

The main problem with austrian econ is that part of it is based on marginal productivity theory which was debunked by Sraffa, Robinson and co during the cambridge capital controversy.

[Skooma Addict]

The main problem with austrian econ is that part of it is based on marginal productivity theory which was debunked by Sraffa, Robinson and co during the cambridge capital controversy.

I am going to force myself not to contest you on this only because this is a topic about how all topics are about Mises/AE.

Luckily, I have a very simple solution: You guys should stop making so many threads on Mises/AE.

[Nolan]

I am going to force myself not to contest you on this only because this is a topic about how all topics are about Mises/AE.

Luckily, I have a very simple solution: You guys should stop making so many threads on Mises/AE.

This was started by an oier

[Dean]

I am going to force myself not to contest you on this only because this is a topic about how all topics are about Mises/AE.

Luckily, I have a very simple solution: You guys should stop making so many threads on Mises/AE.

But its like a car wreck. Its terrible, sure, but you just can't turn away.

[Zanthorus]

I am going to force myself not to contest you on this only because this is a topic about how all topics are about Mises/AE.

Well the thread title quite clearly says "Critique of Austrian Economics", although we may have gone away from that slightly it doesn't mean we can't still have discussion about it. Maybe we should kick this off with some Nitzan & Bichler:


The central problem, identified already by Wicksell at the turn of the century, is the very ‘quantity’ of capital (Wicksell 1935, Vol. 1: 149, originally published in 1901–6). According to received convention, a given capital usually is associated with different types of capital goods. This heterogeneity means that capital goods cannot be aggregated in terms of their own ‘natural’ units. The only way to ‘add’ a machine producing aircraft parts to one making shoes to another making biscuits is by summing their values measured in money. The money value of any capital good – that is, the amount investors are willing to pay for it – is the present value of its expected future profit (computed by discounting this profit by the prevailing rate of interest, so value = expected profit / rate of interest).

Now, as long as our purpose is merely to measure the money value of capital, this method is hardly problematic and is indeed used regularly by investors around the world. The difficulty begins when we interpret such
value as equivalent to the ‘physical’ quantity of capital.

To see the problem, suppose that the rate of interest is 5 per cent and that a given machine is expected to yield $1 million in profit year after year in perpetuity. Based on the principle of present value, the machine should have a physical quantity equivalent to $20 million (= $1 million / 0.05). But then what if expected profit were to go up to $1.2 million? The present value should rise to $24 million (= $1.2 million / 0.05) – yet that would imply that the very same machine can have more than one quantity! And since a given machine can generate many levels of profit, there is no escape from the conclusion that capital in fact is a ‘multiple’ entity with an infinite number of quantities. . . .

As it turns out, Clark’s productivity theory of distribution is based on a circular notion of capital: the theory seeks to explain the magnitude of profit by the marginal productivity of a given quantity of capital, but that quantity itself is a function of profit – which is what the theory is supposed to explain in the first place! Clark assumed what he wanted to prove. No wonder he couldn’t go wrong.

(This is actually the critique of Clark's productivity theory that was touted pre-Sraffa. But it serves us as a good starting point to seeing the holes in the theory)

[Skooma Addict]

This was started by an oier

Yea, some are started by OIer's. I mean, a few topics are fine, just not every other topic.

[Dermezel]

Until most people here gets fed up with Austrians and talking about them... stupid idea.

We have to keep hounding this because Marx's Centralization theory is scientifically proven.. The only alternative "theory" is untestable. As long as we let this go people will not understand it is pretty much science vs. pseudoscience.

As the video game phrase goes, the bigger they are, the bigger the obvious glowing weak spot.

Also Keynesianism, while politically progressive within the context of US culture is simply a hybrid theory of the previous mentioned two. It is the "theistic evolution" of economics.

[Skooma Addict]

Zanthorus, I don't see how what you presented is even relevant to modern marginal productivity theory. You don't even need to measure productivity in monetary terms if you don't want to. In fact, if prices are changing then it is usually better to measure productivity in terms of output. The fact that the same machine can generate many levels of profit in no way refutes the concept of marginal productivity.

Marginal productivity is one of the most empirically well supported concepts and it is implemented by practically every business as it useful of attaining the most efficient method of production.

Edit: PM me if you want to discuss this further. I feel like we shouldn't be having this argument in the same thread where we are talking about how every topic is about AE.

[Dermezel]

Marginal productivity is one of the most empirically well supported concepts and it is implemented by practically every business as it useful of attaining the most efficient method of production.

So why do the Austrians admit it can't be tested?

[Dean]

Edit: PM me if you want to discuss this further. I feel like we shouldn't be having this argument in the same thread where we are talking about how every topic is about AE.

Actually, I'd prefer if you guys kept it here. I'd like to see where this goes.

[Dermezel]

Actually, I'd prefer if you guys kept it here. I'd like to see where this goes.

Ha!

You know where it's gonna go. It's gonna be science vs. pseudoscience. Marx spent 20+ years working on Capital and wanted to spend longer (was rushed by Engels) .

It reminds me of Darwin. He likewise spent 20+ years working on Origin of Species and wanted to spend longer (was rushed by Wallace) .

Both Marx's and Darwin's research is solid. You really can't argue with it unless you use these (http://www.youtube.com/watch?v=aGcir8GzvKE) tactics.

BTW that is my dream girl.

[Havet]

BTW that is my dream girl.

You're weird

[Dermezel]

You're weird

Freakin' aggro dude- Shows you what she's like in bed!

[Bud Struggle]

Freakin' aggro dude- Shows you what she's like in bed!

She'll have knives. :)

[Dermezel]

She'll have knives. :)

Good. That's 1 way to go!

[anticap]

:laugh: How does it feel walking such a thin line?

:confused: I don't understand the question.


The main problem with austrian econ is that part of it is based on marginal productivity theory which was debunked by Sraffa, Robinson and co during the cambridge capital controversy.

Marginal productivity is debunked by the self-evident fact that neither land nor capital are persons. The landlords and capitalists simply raise their hands, like excited children, and say, "Ooh, ooh! We'll accept payment on behalf of Land and Capital! Pick us! Pick us!"

This shit is so fucking inane that sometimes I wonder if maybe I never came down from one of my old acid trips.

[Skooma Addict]

Ha!

You know where it's gonna go. It's gonna be science vs. pseudoscience. Marx spent 20+ years working on Capital and wanted to spend longer (was rushed by Engels) .

It reminds me of Darwin. He likewise spent 20+ years working on Origin of Species and wanted to spend longer (was rushed by Wallace) .

I honestly did lol when I read this.

[IcarusAngel]

Not all people who believe in "markets" are insane though. We need to answer the social democrats.

I think the left's failure is not so much that we haven't answered the fringe capitalists, all of whose arguments have been debunked by the social democrats, but that we haven't answered the social democrats. Consider the fact that the left can't even decide if laissez-faire capitalism or social capitalism is the next stage of the capitalism.

Another problem is that capitalism has created such big problems that only mass collective action from entities as large as corporations themselves can help to combat them, with support of the public. The left, pending revolution, is basically useless here and offers zero advice.

Basically, social democrats want some things owned by the public and some things owned by the private dictators. The problem is that the stuff that is owned by the public has to go through the government as an intermediary. However, some political scientists, like Ferguson, believe that the government should rearrange its laws so that the public can own cooperatives too.

This is why the "market anarchists" hate the government because it suffers from a fatal flaw: namely, the public is able to have input on it. That is the only reason they dislike our government, and in fact openly prefer fascism etc. to democracy. They believe an elite set of corporations should own the land instead of having it dynamically owned and controlled even though it's clear that rearranging land ownership titles is a good thing, as is breaking up monopolies.

The point is that the far right is not winning. If they had won all countries would be fascist/capitalist/laissez-faire or a mix of that, and this is what most leftist writing, be it anarchist or Marxist, attacks.

On the plus side, anarcho-capitalism etc. has been refuted, even on the internet. But this is pointless because nobody is an anarcho-capitalist.

It seems to me that the next change of capitalism or into a new system will come from some kind of rearranging by the social democrats, rather than the left.

What I HOPE will happen is that third world countries become social democracies so they can pull themselves out of free-market tyranny. This probably should be the current goal: abolish nineteenth-century free-market capitalism in the third-world, they've been punished enough.

[Skooma Addict]

We should always remember to differentiate between actual supporters of the free market and Icarus' imaginary supporters of the free market. For the latter, everything Icarus said is true. For the former, it is not.

[Robert]

They believe an elite set of corporations should own the landThis "they" would be ... the Miseans? Run!


the fringe capitalists Miseans?


"market anarchists" hate the government I.e., Miseans?


On the plus side, anarcho-capitalism etc. has been refuted, even on the internet.Okay.


But this is pointless because nobody is an anarcho-capitalist.
Right. A pointless plus.


We haven't answered the social democrats.Your answer is this, I think: only mass collective action from entities as large as corporations themselves can help to combat them, with support of the public.

Stockholders don't want corporations to be instruments of their own demise, if that's what you are looking for. You know that. And as we have noted ad nauseam ... everybody's a stockholder. You know that, too.

Icarus, you have always struck me as a reformist. If you are, why not say so and join the riff raff in OI? You have pretty effectively discredited the silly left in your post, if only en passant.

[Left-Reasoning]

Um, no. The state exists so anything that happens in the market is the fault of the state.

Anything BAD that happens that is. This statement is essentially correct.


When the state is abolished, capitalists won't be able to pay people to do their bidding. Incentives to provide services for those with purchasing power simply won't exist!

When the State is abolished, there won't be capitalists.

[Dean]

Anything BAD that happens that is. This statement is essentially correct.

When the State is abolished, there won't be capitalists.
:laugh: The fact that you take this obvious sarcasm seriously is a real testament to how deluded your ilk is.

Capitalism isn't the sole source of problems in society. Neither is the state. To take either line is incredibly delusional and will simply lead to ignorance of the systems we deal with on a daily basis.

Get out of your idealist ghetto and start learning about whats going on:

http://www.consortiumnews.com/
http://exiledonline.com/
http://english.aljazeera.net/
http://whowhatwhy.com/
(http://whowhatwhy.com/)http://www.csmonitor.com/
http://therealnews.com/t2/

(disregard the criticism if you were actually being sarcastic ;))

[Havet]

Capitalism isn't the sole source of problems in society. Neither is the state

So what is?

[Dean]

So what is?

None. There are a myriad of variables. It's laughable that you even think "one sole faulty system" can be found.

[Havet]

None. There are a myriad of variables. It's laughable that you even think "one sole faulty system" can be found.

I didn't. But your subjective tone is so vague that posting or not posting wouldn't have made any difference.

[Grozny]

This was started by an oier

Yes it was.

So is anybody going to actually comment on the OP or are you guys going to just paste in a bunch of links to communist sites?

[Dean]

I didn't. But your subjective tone is so vague that posting or not posting wouldn't have made any difference.
Why ask "what is x" when I've said "there is no x"? ("x" being "the sole source of problems in society.")

Just trying to be cute? Good job :thumbup1:

[Dean]

Yes it was.

So is anybody going to actually comment on the OP or are you guys going to just paste in a bunch of links to communist sites?
"Guys" indicates a plural, and yet only one leftist posted links in this thread as far as I can tell.

You may as well be criticizing Hitler from a right wing perspective. Naturally, the issue is fairly disinteresting for us.


:confused: I don't understand the question.
That was directed at hayenmill somewhere, I don't know why on earth it ended up in this thread.

[Grozny]

"Guys" indicates a plural, and yet only one leftist posted links in this thread as far as I can tell.

i was referring to you.


Get out of your idealist ghetto and start learning about whats going on:

link
link
link
link
link
link


Here's another one with a bunch of links.


It's untestable. That's really all you have to say.

link
link
link

That's it. Marxism is testable. The centralization of capital is observed. Not just observable, but observed.

The labor theory of value was empirically proven before Marx by Ricardo. It is to this day confirmed in fields like Industrial Engineering where the various planning programs utilize labor as the primary variable to determining costs.

To this day, in practice, no Industrial Engineer utilizes marginal utility. Only weird marketing groups and right-wing economic theorists use that.

And again, it is untestable. In science or any empirical study in our modern era any untestable theory is basically mysticism.

Honestly, this is the stupidest quotation I've run across on any economics forum. All real economists of every school know that Menger refuted the labor theory of value in 1871. Do I really have to dig up that mouldering corpse and stick another knife in it's skeletal ribs?

All this talk of "testable" and "observed" is just standard post-autistic claptrap. They throw all logic over board and then try to dazzle us with a bunch of made-up statistics. Anybody who is not dazzled is denounced as "autistic."



I think mathematics drives some people crazy. They can't handle it. Some can handle more than others, and they thus don't get totally crazy until the end of their life (Pythagoras, Godel, etc.).

Like what this guy is doing.

[anticap]

Menger refuted the labor theory of value in 1871.

Patent nonsense. Menger didn't even understand Marx's LTV.

[Cal Engime]

I'm not sure Menger even knew of Marx.

[Dean]

Here's another one with a bunch of links.

I didn't know that a single one of those sites was communist - what a shocker!

[Zanthorus]

Marginal productivity is one of the most empirically well supported concepts and it is implemented by practically every business as it useful of attaining the most efficient method of production.

Well where is the empirical evidence and the business' that use it? From the evidence I can see it is an empirically false theory which business' don't actually use:

http://www.debunkingeconomics.com/Value/Actual/Index.htm


When the State is abolished, there won't be capitalists.

So finance capital will just magically dissapear off the face of the earth?


All real economists of every school know that Menger refuted the labor theory of value in 1871.

By "real economists" what you actually mean is academic economists who largely subscribe to the neo-classical or neo-"Keynesian" (Debabatable since they ignore many of Keynes' key innovations which arguably make the whole project to synthesise Keynesianism and neo-classical economics useless) paradigms. And Menger did not actually attempt a refutation of the Labour Theory of Value as far as I'm aware, just asserted Marginalism as a possible alternative. That's not a "refutation" it merely means that the floor has been opened up for scholarly debate between the Marginalist and Cost-Price/Labour Value schools. In fact there doesn't necessarily really need to be any kind of debate since the two schools for the most part explain different things. According to the Marginalist school every new unit of a good is less valuable to the consumer than the last unit of a good and the market price is the point where supply is equal to demand. According to the Cost-price/Labour Value school long relative run equilibrium prices are equal to the relative socially necessary labour time embodied in commodities. The two are not necessarily incompatible.

And as far as I'm aware most mainstream economists would reject Menger's formulation of marginal utility as being an a priori truth based on the logic of human action (Menger did not actually explicitly state this however he was the first member of the causal-realist faction of Austrian economics which was systematised by Ludwig Von Mises) and go for William Stanley Jevons' arguments that it was a theory of the psychology of consumers.


Do I really have to dig up that mouldering corpse and stick another knife in it's skeletal ribs?

This is a fundamentally unscientific and uniquistive attitude which if followed to it's logical conclusions would lead to intellectual stagnation.

Imagine someone saying to Albert Einstein:

"Do I really have to dig up that mouldering corpse of the particle theory of light and stick another knife in it's skeletal ribs?"

The problem is that you seem to believe that science moves ever forward towards "truth", the "truth" being something arrived at passively by humans who merely passively observe and interpret the facts to arrive at conclusions, which is a highly whiggish (http://en.wikipedia.org/w/index.php?title=Whig_history&oldid=346181942) view.

Scientists need money to do research and what they can get funding for will effect what they can research. Let no-one forget that the man who founded the university of Chicago was one John D. Rockefeller who later noted that it was the best investment he ever made. Also humans do not passively interpret the facts. Instead they actively seek out explanations and derive ones that fit the known facts, then when new evidence comes in they will try and change or alter the paradigm in order to fit. Only when large amounts of empirical and theoretical research show the flaws in the current paradigm will it be overthrown in favour of the new paradigm.

So far the Labour Value school is a minority with very little funding which is no surprise since most of us seek the overthrow of the capitalist system. Not exactly the best way to attract capitalists to invest in your research...

Also LTV'ers barely ever get published in mainstream journals.

[Skooma Addict]

Well where is the empirical evidence and the business' that use it? From the evidence I can see it is an empirically false theory which business' don't actually use:

http://www.debunkingeconomics.com/Va...tual/Index.htm (http://www.debunkingeconomics.com/Value/Actual/Index.htm)

Can you tell me how that paper is supposed to refute the concept of marginal productivity? Is it also supposed to be surprising that very few firms actually have MR equal to MC? Companies also take other things into account such as demand forecasting and acquiring new customers and a well known brand name.

Also,

"According to Eiteman, engineers design factories so as to cause the variable factor to be used most efficiently when the plant is operated close to capacity."


This is only true some of the time. This is not true all of the time. Maybe not even the majority of the time. It certainly isn't true in growth/developing markets where customer service and product development is valued over internal efficiency.

[Salyut]

I love Walter Block. (http://mises.org/daily/3419) Also the most masturbatory book review in the history of the interweb. (http://mises.org/store/Privatization-of-Roads-and-Highways-P581.aspx)

I still don't understand how a group that proposes the legalization of drunk driving manages to get any sort of following at all. :confused:

[Left-Reasoning]

I love Walter Block. (http://mises.org/daily/3419) Also the most masturbatory book review in the history of the interweb. (http://mises.org/store/Privatization-of-Roads-and-Highways-P581.aspx)

I still don't understand how a group that proposes the legalization of drunk driving manages to get any sort of following at all. :confused:

http://www.lewrockwell.com/rockwell/drunkdriving.html

[Salyut]

http://www.lewrockwell.com/rockwell/drunkdriving.html


In fact, driver profiling is worse than racial profiling, because the latter only implies that the police are more watchful, not that they criminalize race itself. Despite the propaganda, what’s being criminalized in the case of drunk driving is not the probability that a person driving will get into an accident but the fact of the blood-alcohol content itself. A drunk driver is humiliated and destroyed even when he hasn’t done any harm.

what

[Cal Engime]

Yes it was.

So is anybody going to actually comment on the OP or are you guys going to just paste in a bunch of links to communist sites?Sir, I have read your post several times and I still do not know exactly what you are talking about. My conclusion is that YOU do not know what you are talking about.

Please rewrite it completely.

[LeftSideDown]

I love Walter Block. (http://mises.org/daily/3419) Also the most masturbatory book review in the history of the interweb. (http://mises.org/store/Privatization-of-Roads-and-Highways-P581.aspx)

I still don't understand how a group that proposes the legalization of drunk driving manages to get any sort of following at all. :confused:

Its very simple, did you actually read the article?

Why is drunk driving illegal? Answer: because it increases ones chances of actually committing a crime (although drunk driving is a crime now, it is only so because legislators say so; there is nothing inherently wrong with consuming a substance then operating a machine).

What do I mean by this? Answer: If one consumes a substance that intoxicates you and reduces your faculties and you begin to drive a car you have a higher chance of running into someones house, hitting a person, or causing an accident. You have not actually done something that is inherently wrong (as shown by the stipulation that one's BAC must be above a certain point to be charged with a DUI or DWI). If it was inherently wrong to drink and drive then any BAC greater than 0 would be illegal. Obviously at higher levels of intoxication you're more impaired and you have a higher chance of committing a crime, hence the limit.

You think this is okay (the criminalization of drunk driving) because this is the way you have been brought up. But lets apply it elsewhere. People who are poor and/or in poverty have a higher chance of committing crime. This is a pretty widely recognized and studied phenomena. While I could just as easily say if you are a member of some minorities you are more likely to commit a crime, but using this example I would be left open to the interpretation that I am something that I am not and this is a racist. So, on with the example. Poor people have a higher chance of committing a crime. So, let us make a law that requires everybody to carry a card around, issued by the state, that shows how much you make in a year. If anyone is caught doing something suspicious a police officer could approach them and ask for their card. If their income is below a certain amount then the cop would know that there is a higher chance that person was going to commit a crime. That person could then be jailed for "Suspicious Activity with a Low Income". This would be the same and serve the same purpose as drunk driving laws; namely reducing the occurrence of crime through the criminalizing of actions/states that increase likelihoods of committing crimes.

[Dean]

You think this is okay (the criminalization of drunk driving) because this is the way you have been brought up. But lets apply it elsewhere. People who are poor and/or in poverty have a higher chance of committing crime. This is a pretty widely recognized and studied phenomena. While I could just as easily say if you are a member of some minorities you are more likely to commit a crime, but using this example I would be left open to the interpretation that I am something that I am not and this is a racist. So, on with the example. Poor people have a higher chance of committing a crime. So, let us make a law that requires everybody to carry a card around, issued by the state, that shows how much you make in a year. If anyone is caught doing something suspicious a police officer could approach them and ask for their card. If their income is below a certain amount then the cop would know that there is a higher chance that person was going to commit a crime. That person could then be jailed for "Suspicious Activity with a Low Income". This would be the same and serve the same purpose as drunk driving laws; namely reducing the occurrence of crime through the criminalizing of actions/states that increase likelihoods of committing crimes.

I agree with you about drunk driving, but the last point you make is interesting. It shows that social norms such as poverty, rather than the individual, are explicitly to blame in at least some number of crimes.

[LeftSideDown]

I agree with you about drunk driving, but the last point you make is interesting. It shows that social norms such as poverty, rather than the individual, are explicitly to blame in at least some number of crimes.

You... you agree with me?

And I don't think your social standing is "explicitly to blame". Thats like saying the alcohol was "explicitly" to blame because someone who was drinking, driving, and crashed had consumed alcohol. Did alcohol contribute? Yes, maybe, possibly. Was it explicitly to blame? I don't think so, there are other factors (someones tolerance to alcohol, whether they were male or female, how good their vision is).

[Salyut]

Its very simple, did you actually read the article?

Yes, I did. In the end it amounted to Block furiously jerking off to privatized roads and how MADD should be the vanguard organization to archiving glorious anarcho-capitalist state. :rolleyes:


For one thing, private organizations such as MADD are what have made this country great; government bureaucrats, operating way past their capacities, have always brought us down. For another, those presently in charge of our roadways are not just part of the problem; they pretty much are the problem. When and if a Nuremberg-type trial is ever held for those responsible for thousands upon thousands of unnecessary traffic fatalities, these are the very people who will be prime candidates for occupancy in the dock.[/B]

How am I supposed to take anything this man says seriously?

[LeftSideDown]

Yes, I did. In the end it amounted to Block furiously jerking off to privatized roads and how MADD should be the vanguard organization to archiving glorious anarcho-capitalist state. :rolleyes:

I was talking about the drunk driving article.


How am I supposed to take anything this man says seriously?

Wouldn't you want some heads to roll if a capitalist bread company's bread was killing 40,000 people a year?

[Grozny]

Sir, I have read your post several times and I still do not know exactly what you are talking about. My conclusion is that YOU do not know what you are talking about.

Please rewrite it completely.

Too many big words?



I still don't understand how a group that proposes the legalization of drunk driving manages to get any sort of following at all. :confused:

Drunk driving wasn't among my seven points. Can we get this thread back on topic, please?

[Salyut]

Drunk driving wasn't among my seven points. Can we get this thread back on topic, please?

My bad. :<

[mikelepore]

Its very simple, did you actually read the article?

Why is drunk driving illegal? Answer: because it increases ones chances of actually committing a crime (although drunk driving is a crime now, it is only so because legislators say so; there is nothing inherently wrong with consuming a substance then operating a machine).

What do I mean by this? Answer: If one consumes a substance that intoxicates you and reduces your faculties and you begin to drive a car you have a higher chance of running into someones house, hitting a person, or causing an accident. You have not actually done something that is inherently wrong (as shown by the stipulation that one's BAC must be above a certain point to be charged with a DUI or DWI). If it was inherently wrong to drink and drive then any BAC greater than 0 would be illegal. Obviously at higher levels of intoxication you're more impaired and you have a higher chance of committing a crime, hence the limit.

You think this is okay (the criminalization of drunk driving) because this is the way you have been brought up. But lets apply it elsewhere. People who are poor and/or in poverty have a higher chance of committing crime. This is a pretty widely recognized and studied phenomena. While I could just as easily say if you are a member of some minorities you are more likely to commit a crime, but using this example I would be left open to the interpretation that I am something that I am not and this is a racist. So, on with the example. Poor people have a higher chance of committing a crime. So, let us make a law that requires everybody to carry a card around, issued by the state, that shows how much you make in a year. If anyone is caught doing something suspicious a police officer could approach them and ask for their card. If their income is below a certain amount then the cop would know that there is a higher chance that person was going to commit a crime. That person could then be jailed for "Suspicious Activity with a Low Income". This would be the same and serve the same purpose as drunk driving laws; namely reducing the occurrence of crime through the criminalizing of actions/states that increase likelihoods of committing crimes.

One of the law makers' considerations in imposing legal penalties is to pressure people who have several choices to make certain choices rather than others.

It's true that poor people have a higher chance of ending up committing certain kinds of criminal actions. But poor people might not know of ways to remove themselves from that danger. Their course isn't as simple as choosing an alternative plan: press the right button, don't be poor today, just knock it off already.

However, the drunk driver knows about the ready alternatives. If you will need to drive home, drink something non-intoxicating at the party. If you want to drink alcohol, when it's time to go home, call a taxi cab.

--

EDIT:

Speaking of the human power to make certain choices easily, but others not so easily.... Interestingly, the Mises Institute author, economist Walter Block, author of the book 'The Privatization of Roads and Highways', assuming that a "free market" solution to the drunk driver problem is available, would like to simply call upon capitalists to find and make some rational choice. No specific systematic or technical proposal, merely a "just do it." Block wrote: "Privatize the avenues of vehicular transportation, and rely upon the new owners -- under the tutelage of the free-enterprise, profit-and-loss system -- to find solutions."

[anticap]

How am I supposed to take anything [Walter Block] says seriously?

You shouldn't even try (http://www.revleft.org/vb/showpost.php?p=1734619&postcount=36).

[Die Neue Zeit]

Well where is the empirical evidence and the business' that use it? From the evidence I can see it is an empirically false theory which business' don't actually use:

http://www.debunkingeconomics.com/Value/Actual/Index.htm

To be fair, there are attempts to apply Marginalism in things like transfer pricing. However, in Marginalist-speak, the marginal utility for most businesses using Marginalism instead of Cost-Plus-Markup is, ahem, either zero or negative.