3 ms·

To be honest, people are saying that we should have never abandoned the gold standard, which is a bit more nuanced. >The gold standard is effectively no policy

by josu 3y ago

To be honest, people are saying that we should have never abandoned the gold standard, which is a bit more nuanced. >The gold standard is effectively no policy because it gives control of the money supply over to control of the gold supply. Hayek (he too had an econ degree I believe) could argue that advocating for the gold standard isn't necessarily advocating for "no policy." It is advocating for a different kind of policy, one that places more trust in market mechanisms rather than central planning. >Advocate for better policy. No matter how good of a policy you have for predicting Roulette numbers, your policy will be just as good as choosing at random, and most likely worse. Hayek would argue that there was a "knowledge problem" and no amount of econ degrees can solve it.

npongratz 3y ago
> Hayek (he too had an econ degree I believe)... I don't think Hayek had an economics degree, but in 1974 he did earn the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel: https://www.nobelprize.org/prizes/economic-sciences/1974/hayek/facts/ https://www.nobelprize.org/prizes/economic-sciences/1974/hay...
- tnecniv 3y ago
  I checked: his doctorates were in law and political science, with his undergraduate background consisting of a combination of philosophy, psychology, and economics.
slg 3y ago
>Hayek (he too had an econ degree I believe) could argue that advocating for the gold standard isn't necessarily advocating for "no policy." It is advocating for a different kind of policy, one that places more trust in market mechanisms rather than central planning. Yes, this was why I said "effectively no policy" and compared it to removing regulation in the wake of 2008. It isn't literally "no policy" in the same way that anarchy is still technically a governing philosophy. But it is still effectively the same as no policy by taking a laissez-faire approach. >No matter how good of a policy you have for predicting Roulette numbers, your policy will be just as good as choosing at random, and most likely worse. Hayek would argue that there was a "knowledge problem" and no amount of econ degrees can solve it. This is what I described as defeatist. The economy isn't roulette. In roulette, it is impossible to observe, react, and predict. I don't believe that is true of the economy. It seems borderline silly to suggest we can't observe an economic trend and react to it.
- josu 3y ago
  > It seems borderline silly to suggest we can't observe an economic trend and react to it. Oh, yeah, we can react. The same way you start betting on red after you see 3 reds in a row.
  - slg 3y ago
    Trends don't happen in roulette. Each round is independent (assuming the equipment is properly calibrated and there isn't any cheating). That isn't true with the economy. For example, unemployment numbers in one month are strongly correlated with the numbers in both the previous and next month. This is obvious just looking at a graph of the unemployment rate[1]. I can say with a high level of confidence that the rate for September will be in the 3.5%-4% range because it has been that way since 2022. Can you honestly look at that data and tell me it is as random as roulette? [1] - https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm https://www.bls.gov/charts/employment-situation/civilian-une...
    - josu 3y ago
      I'm doing a terrible job at trying to communicate the Austrian School of thought, apologies. But if you are really interested in the matter I would suggest reading Hayek, or any other Austrian. These couple of articles are a good starting point: - https://en.wikipedia.org/wiki/Economic_calculation_problem https://en.wikipedia.org/wiki/Economic_calculation_problem - https://en.wikipedia.org/wiki/Austrian_school_of_economics https://en.wikipedia.org/wiki/Austrian_school_of_economics
dredmorbius 3y ago
Hayek's doctorates were in law and political science. He had studied economics but did not receive a PhD in it. <https://en.wikipedia.org/wiki/Friedrich_Hayek https://en.wikipedia.org/wiki/Friedrich_Hayek>

by josu 3y ago

npongratz 3y ago

> Hayek (he too had an econ degree I believe)... I don't think Hayek had an economics degree, but in 1974 he did earn the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel: https://www.nobelprize.org/prizes/economic-sciences/1974/hayek/facts/ https://www.nobelprize.org/prizes/economic-sciences/1974/hay...

tnecniv 3y ago
I checked: his doctorates were in law and political science, with his undergraduate background consisting of a combination of philosophy, psychology, and economics.

slg 3y ago

>Hayek (he too had an econ degree I believe) could argue that advocating for the gold standard isn't necessarily advocating for "no policy." It is advocating for a different kind of policy, one that places more trust in market mechanisms rather than central planning. Yes, this was why I said "effectively no policy" and compared it to removing regulation in the wake of 2008. It isn't literally "no policy" in the same way that anarchy is still technically a governing philosophy. But it is still effectively the same as no policy by taking a laissez-faire approach. >No matter how good of a policy you have for predicting Roulette numbers, your policy will be just as good as choosing at random, and most likely worse. Hayek would argue that there was a "knowledge problem" and no amount of econ degrees can solve it. This is what I described as defeatist. The economy isn't roulette. In roulette, it is impossible to observe, react, and predict. I don't believe that is true of the economy. It seems borderline silly to suggest we can't observe an economic trend and react to it.

josu 3y ago
> It seems borderline silly to suggest we can't observe an economic trend and react to it. Oh, yeah, we can react. The same way you start betting on red after you see 3 reds in a row.
- slg 3y ago
  Trends don't happen in roulette. Each round is independent (assuming the equipment is properly calibrated and there isn't any cheating). That isn't true with the economy. For example, unemployment numbers in one month are strongly correlated with the numbers in both the previous and next month. This is obvious just looking at a graph of the unemployment rate[1]. I can say with a high level of confidence that the rate for September will be in the 3.5%-4% range because it has been that way since 2022. Can you honestly look at that data and tell me it is as random as roulette? [1] - https://www.bls.gov/charts/employment-situation/civilian-unemployment-rate.htm https://www.bls.gov/charts/employment-situation/civilian-une...
  - josu 3y ago
    I'm doing a terrible job at trying to communicate the Austrian School of thought, apologies. But if you are really interested in the matter I would suggest reading Hayek, or any other Austrian. These couple of articles are a good starting point: - https://en.wikipedia.org/wiki/Economic_calculation_problem https://en.wikipedia.org/wiki/Economic_calculation_problem - https://en.wikipedia.org/wiki/Austrian_school_of_economics https://en.wikipedia.org/wiki/Austrian_school_of_economics

dredmorbius 3y ago

Hayek's doctorates were in law and political science. He had studied economics but did not receive a PhD in it. <https://en.wikipedia.org/wiki/Friedrich_Hayek https://en.wikipedia.org/wiki/Friedrich_Hayek>