6 ms·

I think you underestimate the influence of Hayek, Friedman et al, whose moralistic market fetish has become the dominant ideology of Washington, London et al.

I think you underestimate the influence of Hayek, Friedman et al, whose moralistic market fetish has become the dominant ideology of Washington, London et al. For a more evidence-based approach, I'll go with Keynes' General Theory, which works, but has few adherents among the major parties in the West.

loganfrederick 14y ago
Provide evidence that Hayek and Friedman are the dominant ideology in Washington. If we wanted to try and accurately describe the economic policy by the government in Washington, you'd have to describe the monetary and fiscal policies. Both of these since 2007 have been Keynesian far more than the other two schools (Monetarist and Austrian). This hasn't always been the case (Friedman was much more in vogue from the late 70s to approximately late 90s as measured by policies put in place). Keynes General Theory could theoretically work as he describes in his book, but is unrealistic in practice because of the political dynamics in government.
- yk 14y ago
  The idea that markets usually produce a optimal outcome is certainly austrian ( examples for this is the washington consensus). On the other hand, there are serveral proposals from 2008 - 09 on the size of the stimulus, eg [1], which argue that a stimulus should be something like twice the size of the actual stimulus. ( And additionally bailing out car companies is not exactly Keynesian, since aggregate demand is not about one specific industry.) [1]http://krugman.blogs.nytimes.com/2009/10/05/the-story-of-the-stimulus/ http://krugman.blogs.nytimes.com/2009/10/05/the-story-of-the...
  - nickik 14y ago
    > The idea that markets usually produce a optimal outcome is certainly austrian Im sorry this is not right. It is in fact dead wrong! The austrian have from the VERY, VERY start objected to models that discribed market as perfect, or people as perfectly rational. Go into the internet and look up what austrians actually say about markets, google 'Market Process Theory'. It is actually the case that most of austrian theory trys to figure out how a groupe of ignorent humans like we are with our imperfection can creat such a complex structure of production or what Hayek called 'The extended order' Why do people that have a bar half knowlage of economics, clame such wild things about a 120 year old tradition of economic thought. The thing that most austrians clame, is that the market produces better results then a goverment influencing the market can that is because goverment does not have the knowlage (nor the insentive but that more public choice theory) to imporve the market outcome.
    - yk 14y ago
      I am not claiming that austrians think markets are perfect. I did say, that austrians believe that markets produce optimal outcomes, compared to other possible organization structures. ( So quite exactly what you say in your last paragraph.)
      - nickik 14y ago
        Ok, Im sorry then. The problem is that with optimal we usally mean theoreticly optimal in such debates. In terms of practical solution we speak of comperative advantage (in comperative institutional analysis).
- altcognito 14y ago
  It is impossible to prove that there is any consistent dominant ideology. But to show that there are those advocating "Austrian" principals - look no further than the Republican think-tank AEI: http://www.aei-ideas.org/2012/08/explaining-paul-ryans-austrian-approach-to-monetary-policy/ http://www.aei-ideas.org/2012/08/explaining-paul-ryans-austr...
  - nickik 14y ago
    The clame the the democrats or the republicans are anyway free market oriented is crazy. Both partys like to spend money, and the like to spend money on there friends. Sure Bush talked about Free Markets but not even closly did anything about it, what he did was start a war, make a lot of debt, regulation increased in that time too. Goverment only ever gets bigger, with very few expetion. From a free market perspective the republicans are not any diffrent then the democrats. I btw am not from america, I have no idiolocial views in american politics, I just obeserve that both partys are not free market at all. It was actually a democrat who was the only one that at least ran on a balanced buget (clinton).
- nhaehnle 14y ago
  If we wanted to try and accurately describe the economic policy by the government in Washington, you'd have to describe the monetary and fiscal policies. Both of these since 2007 have been Keynesian far more than the other two schools (Monetarist and Austrian). Maybe you cannot describe those policies as Monetarist or Austrian. But given that everybody's policies there are driven by some desire to cut the budget deficit at a time of a very weak economy - with the only disagreement being over how the cuts should look - it just seems very bizarre to call that Keynesian.
  - nickik 14y ago
    Talking about something and doint something are very diffrent things. First of all neither stimules nor saving companys is anything to do with free markets. Both party want to spend more money, I would not belive for a second that republicans are more free market then democrats. The like to talk about it more but they infact are just ass bad. The real diffrence is what friends they have. Both partys like to spend money on there friends. Lets talk about free markets again when the actually DID cut the buged and I think nobody denys that the stimuls is keynesian.
rayiner 14y ago
Empiricism and Kahneman et al. are going to tear down the house that Friedman built.
- Symmetry 14y ago
  Could you talk about what you think the contradictions between Friedman's and Kahneman's work are? As someone who respects both of them I don't really see many except for the Permanent Income Hypothesis which, though, Friedman was very proud of it nobody else seems to think of when they talk about him. His work on the role of money in the economy which he got his Nobel for was all very empirical, and when events showed he was wrong about the stability of velocity he was quick to change his views.
  - rayiner 14y ago
    I'm (lazily) using Friedman as a proxy for the whole Chicago School. I think once behavioral economics forces you to abandon the rational actor model, you really have to go back and reevaluate all the places where you (explicitly and sometimes implicitly) assume that economic actors are rationally wealth-maximizing. With Friedman specifically, this is particularly relevant in all the situations where he wanders away from empiricism (e.g. in his role as economic advisor to Reagan).
    - nickik 14y ago
      I very much agree that the ration acter model is BS. Even befor behavioral economics it was BS, I think it should have been common sence. What has to be considerd is that goverment actors are just as dumb ass market acters, with the importend diffrance that there own ass is not on the line. I think the biggest error in 20 century economics has been to think that the general equillibrium model has any relevane to the real world.
      - rayiner 14y ago
        > I think the biggest error in 20 century economics has been to think that the general equillibrium model has any relevane to the real world. We can agree on this part, and I'll further add that it's also a tremendous error to ignore that the equillibrium is dynamic and to ignore or downplay what happens in the intermediate periods during which the system is in disequillibrium.

loganfrederick 14y ago

Provide evidence that Hayek and Friedman are the dominant ideology in Washington. If we wanted to try and accurately describe the economic policy by the government in Washington, you'd have to describe the monetary and fiscal policies. Both of these since 2007 have been Keynesian far more than the other two schools (Monetarist and Austrian). This hasn't always been the case (Friedman was much more in vogue from the late 70s to approximately late 90s as measured by policies put in place). Keynes General Theory could theoretically work as he describes in his book, but is unrealistic in practice because of the political dynamics in government.

yk 14y ago
The idea that markets usually produce a optimal outcome is certainly austrian ( examples for this is the washington consensus). On the other hand, there are serveral proposals from 2008 - 09 on the size of the stimulus, eg [1], which argue that a stimulus should be something like twice the size of the actual stimulus. ( And additionally bailing out car companies is not exactly Keynesian, since aggregate demand is not about one specific industry.) [1]http://krugman.blogs.nytimes.com/2009/10/05/the-story-of-the-stimulus/ http://krugman.blogs.nytimes.com/2009/10/05/the-story-of-the...
- nickik 14y ago
  > The idea that markets usually produce a optimal outcome is certainly austrian Im sorry this is not right. It is in fact dead wrong! The austrian have from the VERY, VERY start objected to models that discribed market as perfect, or people as perfectly rational. Go into the internet and look up what austrians actually say about markets, google 'Market Process Theory'. It is actually the case that most of austrian theory trys to figure out how a groupe of ignorent humans like we are with our imperfection can creat such a complex structure of production or what Hayek called 'The extended order' Why do people that have a bar half knowlage of economics, clame such wild things about a 120 year old tradition of economic thought. The thing that most austrians clame, is that the market produces better results then a goverment influencing the market can that is because goverment does not have the knowlage (nor the insentive but that more public choice theory) to imporve the market outcome.
  - yk 14y ago
    I am not claiming that austrians think markets are perfect. I did say, that austrians believe that markets produce optimal outcomes, compared to other possible organization structures. ( So quite exactly what you say in your last paragraph.)
    - nickik 14y ago
      Ok, Im sorry then. The problem is that with optimal we usally mean theoreticly optimal in such debates. In terms of practical solution we speak of comperative advantage (in comperative institutional analysis).
altcognito 14y ago
It is impossible to prove that there is any consistent dominant ideology. But to show that there are those advocating "Austrian" principals - look no further than the Republican think-tank AEI: http://www.aei-ideas.org/2012/08/explaining-paul-ryans-austrian-approach-to-monetary-policy/ http://www.aei-ideas.org/2012/08/explaining-paul-ryans-austr...
- nickik 14y ago
  The clame the the democrats or the republicans are anyway free market oriented is crazy. Both partys like to spend money, and the like to spend money on there friends. Sure Bush talked about Free Markets but not even closly did anything about it, what he did was start a war, make a lot of debt, regulation increased in that time too. Goverment only ever gets bigger, with very few expetion. From a free market perspective the republicans are not any diffrent then the democrats. I btw am not from america, I have no idiolocial views in american politics, I just obeserve that both partys are not free market at all. It was actually a democrat who was the only one that at least ran on a balanced buget (clinton).
nhaehnle 14y ago
If we wanted to try and accurately describe the economic policy by the government in Washington, you'd have to describe the monetary and fiscal policies. Both of these since 2007 have been Keynesian far more than the other two schools (Monetarist and Austrian). Maybe you cannot describe those policies as Monetarist or Austrian. But given that everybody's policies there are driven by some desire to cut the budget deficit at a time of a very weak economy - with the only disagreement being over how the cuts should look - it just seems very bizarre to call that Keynesian.
- nickik 14y ago
  Talking about something and doint something are very diffrent things. First of all neither stimules nor saving companys is anything to do with free markets. Both party want to spend more money, I would not belive for a second that republicans are more free market then democrats. The like to talk about it more but they infact are just ass bad. The real diffrence is what friends they have. Both partys like to spend money on there friends. Lets talk about free markets again when the actually DID cut the buged and I think nobody denys that the stimuls is keynesian.

rayiner 14y ago

Empiricism and Kahneman et al. are going to tear down the house that Friedman built.

Symmetry 14y ago
Could you talk about what you think the contradictions between Friedman's and Kahneman's work are? As someone who respects both of them I don't really see many except for the Permanent Income Hypothesis which, though, Friedman was very proud of it nobody else seems to think of when they talk about him. His work on the role of money in the economy which he got his Nobel for was all very empirical, and when events showed he was wrong about the stability of velocity he was quick to change his views.
- rayiner 14y ago
  I'm (lazily) using Friedman as a proxy for the whole Chicago School. I think once behavioral economics forces you to abandon the rational actor model, you really have to go back and reevaluate all the places where you (explicitly and sometimes implicitly) assume that economic actors are rationally wealth-maximizing. With Friedman specifically, this is particularly relevant in all the situations where he wanders away from empiricism (e.g. in his role as economic advisor to Reagan).
  - nickik 14y ago
    I very much agree that the ration acter model is BS. Even befor behavioral economics it was BS, I think it should have been common sence. What has to be considerd is that goverment actors are just as dumb ass market acters, with the importend diffrance that there own ass is not on the line. I think the biggest error in 20 century economics has been to think that the general equillibrium model has any relevane to the real world.
    - rayiner 14y ago
      > I think the biggest error in 20 century economics has been to think that the general equillibrium model has any relevane to the real world. We can agree on this part, and I'll further add that it's also a tremendous error to ignore that the equillibrium is dynamic and to ignore or downplay what happens in the intermediate periods during which the system is in disequillibrium.