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As a layman, I think Austrian school lacks of quantitive ways to do repetitive applied work for fields and industries compared to the mainstream schools. And ma

by LiweiZ 8y ago

As a layman, I think Austrian school lacks of quantitive ways to do repetitive applied work for fields and industries compared to the mainstream schools. And many of the tools and information sources were not available at Mises' time. Our society is based on calculation. Economics as a tool for management teams has to provide effective calculation for as many things as possible. People communicate and make decisions based on the calculation framework and the results. The world's economic states are modelled in a more or less approximate way. The school that can offer more "fact-based" and measurable data and results are welcomed by decision makers and the people work for them. Organizations need them. When many of organizations are using similar frameworks, the can communicate with other similar parties. It's easier for parties to make their data and results compatible to their own system. Just some random thoughts from a layman. And yes, I love Mises' work. But the tooling is missing for a lot of applications. There can be very limited actionable decision you can make if you adopt it. I'm probably misinformed, misunderstood and biased. Just some of my observations and thoughts.

parasubvert 8y ago
You make good points, the main reason these tools don’t exist , however, is that I thought Mises and others felt that economics was about logical deduction from the axioms of human action - Praexology. and thus there was no need for math or empiricism to validate the theories - they were Prima facie correct.
- LiweiZ 8y ago
  I believe what they try to achieve is beyond what we currently have. And if Mises was born in this age, he would've probably go to the biology level or even deeper to start his work. The tooling and data to connect the dots in his mind was simply not there. To me, he wanted something that is not approximate. For those purposes, what you mentioned might be the best tools one can have at starting stage. I think some work in micro-economics has something similar to Mises'. They can work on simulations now to have fact-based and measurable discoveries. In the end, most likely what human can do is limited to the tooling, not the understanding and educated imagination.
  - henvic 8y ago
    How would they measure from simulations, if he can't have the exact set of same people on different situations and your results might vary? Social science isn't "experimentable" as biology or physics... And if you try hard to force it you will end up with what's called social engineering instead...
    - LiweiZ 8y ago
      http://tuvalu.santafe.edu/~wbarthur/ http://tuvalu.santafe.edu/~wbarthur/ W. Brian Arthur is an economist I like. Complexity theory is also very exciting for me. I do not have any experience in those, but they and other things inspired how I perceive the world. I probably did not deliver what I think clearly. The link above might be helpful to deliver what I mean.
    - lurcio 8y ago
      It is 'experimentable' - policies are tested and piloted all the time.
  - Qasaur 8y ago
    >I believe what they try to achieve is beyond what we currently have. And if Mises was born in this age, he would've probably go to the biology level or even deeper to start his work. This isn't really true. When Human Action was written there already was a fair bit of literature on behavioural psychology and other fields, but Mises made a conscious choice to not base his theories on them. In the first part of Human Action Mises does bring this point up but makes a clear distinction between investigations into human behaviour that are rooted in the natural and empirical sciences (i.e. biology) and his own flavour which is rooted in a Kantian-esque introspection. This concept is referred to in Mises' work as well as in the works of his successors as methodological dualism, and is a core tenet of Austrian social analysis.
- henvic 8y ago
  Indeed. And it is a good thing in my layman's point of view because we better explain things in a simpler way and reach conclusions with math only if it is really required. It's like qualitative vs. quantitative. That said, no one would judge you for doing math. However, the important pieces (axioms) don't require it. Lack of math doesn't mean anything bad. See Frédéric Bastiat and Gustave de Molinari. Both are amazing and no math required :)
  - claudiawerner 8y ago
    On that note, we shouldn't forget Ricardo and Marx either.
  - feanaro 8y ago
    Everything boils down to mathematics one way or another, even logic. The trouble with praxeology is not the lack of math, though; it is the notion that results need not be validated empirically because they're based on logic. However, your assumptions (i.e. axioms) need not hold in nature and any number of mistakes could had been made in the reasoning process. This is why being based on logic does not make a model magically free of errors.
- wahern 8y ago
  Marxism took the same approach--attempt to derive absolute truths about the empirical world using pure logic. I don't know if Mises actually applied Hegelian dialectics, but the fundamental approach seems similar. It's all very German--compare Einstein's approach where he generates imaginary paradoxes and then finds higher truths in their resolution. Problem is, the real world is messy. Some aspects of the world are susceptible to logical reductionism, but not all of it. Enough of it is arbitrary that you very quickly fall off the rails, even when it's not obvious. A theory can often seem superficially more consistent than it really is simply out of coincidence, insufficient precision, or insufficient predictive power. In the real world the proof is in the application.
  - Allower 8y ago
    You think Marx used logic? Are you insane?
dnautics 8y ago
I'm not an economist, but as a left of center libertarian I'd caution that an obsession with metrics and measurement can introduce biases (often biases that encode subtle class-based prejudices) about what one is measuring with an implicit mentality that what is being measured is an accurate metric for the desired subjective outcome, which very dangerously can slide into a mindless optimization exercise of the metric that gets so detected from the original intent that it begins optimizing for something antithetical. It's not quite praexeology, but I definitely came to this belief through listening to critical rethinking of econometrics by Austrians.
- LiweiZ 8y ago
  For me, there are people want to perfectly analyze a thing and discover its model, there are people try to do something with the thing with whatever they have. We as humans are usually not able to achieve the first. The later is what we have every day, almost all day. A perfect model does not mean we know how to do anything properly. Without a perfect model, it's even less possible. But humans always want to do something while we can ... While most parties are doing things the similar way. They are able to play the same game before the game can not continue. Just another way to put what I said above:)

by LiweiZ 8y ago

parasubvert 8y ago

You make good points, the main reason these tools don’t exist , however, is that I thought Mises and others felt that economics was about logical deduction from the axioms of human action - Praexology. and thus there was no need for math or empiricism to validate the theories - they were Prima facie correct.

LiweiZ 8y ago
I believe what they try to achieve is beyond what we currently have. And if Mises was born in this age, he would've probably go to the biology level or even deeper to start his work. The tooling and data to connect the dots in his mind was simply not there. To me, he wanted something that is not approximate. For those purposes, what you mentioned might be the best tools one can have at starting stage. I think some work in micro-economics has something similar to Mises'. They can work on simulations now to have fact-based and measurable discoveries. In the end, most likely what human can do is limited to the tooling, not the understanding and educated imagination.
- henvic 8y ago
  How would they measure from simulations, if he can't have the exact set of same people on different situations and your results might vary? Social science isn't "experimentable" as biology or physics... And if you try hard to force it you will end up with what's called social engineering instead...
  - LiweiZ 8y ago
    http://tuvalu.santafe.edu/~wbarthur/ http://tuvalu.santafe.edu/~wbarthur/ W. Brian Arthur is an economist I like. Complexity theory is also very exciting for me. I do not have any experience in those, but they and other things inspired how I perceive the world. I probably did not deliver what I think clearly. The link above might be helpful to deliver what I mean.
  - lurcio 8y ago
    It is 'experimentable' - policies are tested and piloted all the time.
- Qasaur 8y ago
  >I believe what they try to achieve is beyond what we currently have. And if Mises was born in this age, he would've probably go to the biology level or even deeper to start his work. This isn't really true. When Human Action was written there already was a fair bit of literature on behavioural psychology and other fields, but Mises made a conscious choice to not base his theories on them. In the first part of Human Action Mises does bring this point up but makes a clear distinction between investigations into human behaviour that are rooted in the natural and empirical sciences (i.e. biology) and his own flavour which is rooted in a Kantian-esque introspection. This concept is referred to in Mises' work as well as in the works of his successors as methodological dualism, and is a core tenet of Austrian social analysis.
henvic 8y ago
Indeed. And it is a good thing in my layman's point of view because we better explain things in a simpler way and reach conclusions with math only if it is really required. It's like qualitative vs. quantitative. That said, no one would judge you for doing math. However, the important pieces (axioms) don't require it. Lack of math doesn't mean anything bad. See Frédéric Bastiat and Gustave de Molinari. Both are amazing and no math required :)
- claudiawerner 8y ago
  On that note, we shouldn't forget Ricardo and Marx either.
- feanaro 8y ago
  Everything boils down to mathematics one way or another, even logic. The trouble with praxeology is not the lack of math, though; it is the notion that results need not be validated empirically because they're based on logic. However, your assumptions (i.e. axioms) need not hold in nature and any number of mistakes could had been made in the reasoning process. This is why being based on logic does not make a model magically free of errors.
wahern 8y ago
Marxism took the same approach--attempt to derive absolute truths about the empirical world using pure logic. I don't know if Mises actually applied Hegelian dialectics, but the fundamental approach seems similar. It's all very German--compare Einstein's approach where he generates imaginary paradoxes and then finds higher truths in their resolution. Problem is, the real world is messy. Some aspects of the world are susceptible to logical reductionism, but not all of it. Enough of it is arbitrary that you very quickly fall off the rails, even when it's not obvious. A theory can often seem superficially more consistent than it really is simply out of coincidence, insufficient precision, or insufficient predictive power. In the real world the proof is in the application.
- Allower 8y ago
  You think Marx used logic? Are you insane?

dnautics 8y ago

I'm not an economist, but as a left of center libertarian I'd caution that an obsession with metrics and measurement can introduce biases (often biases that encode subtle class-based prejudices) about what one is measuring with an implicit mentality that what is being measured is an accurate metric for the desired subjective outcome, which very dangerously can slide into a mindless optimization exercise of the metric that gets so detected from the original intent that it begins optimizing for something antithetical. It's not quite praexeology, but I definitely came to this belief through listening to critical rethinking of econometrics by Austrians.

LiweiZ 8y ago
For me, there are people want to perfectly analyze a thing and discover its model, there are people try to do something with the thing with whatever they have. We as humans are usually not able to achieve the first. The later is what we have every day, almost all day. A perfect model does not mean we know how to do anything properly. Without a perfect model, it's even less possible. But humans always want to do something while we can ... While most parties are doing things the similar way. They are able to play the same game before the game can not continue. Just another way to put what I said above:)