Quote of the Day: Why Politicians Hate Economic Science

 

“Entirely new perspectives were opened when the economists discovered that there prevails a regularity in the sequence and interdependence of market phenomena. It was the first step to a general theory of human action, praxeology. For the first time people became aware of the fact that, in order to succeed, human action must comply not only with what are called the laws of nature, but also with specific laws of human action.

“There are things that even the most efficient constabulary of a formidable government cannot bring about, although they may not appear impossible from the point of view of the natural sciences.

“It was obvious that the claims of this new science could not fail to give offense from three points of view. There were first of all the governments. Despots as well as democratic majorities are not pleased to learn that their might is not absolute. Again and again they embark upon policies that are doomed to failure and fail because they disregard the laws of economics. But they do not learn the lesson. Instead they employ hosts of pseudoeconomists to discredit the “abstract,” i.e., in their terminology, vain teachings of sound economics.”

—Ludwig von Mises, Epistemological Relativism in the Sciences of Human Action

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  1. Susan Quinn Contributor
    Susan Quinn
    @SusanQuinn

    Mark Camp: Instead they employ hosts of pseudoeconomists to discredit the “abstract,” i.e., in their terminology, vain teachings of sound economics.”

    Reminds me of Biden and his 17 Nobel laureates in economics, whose ideas he distorted.

    • #1
  2. RightAngles Member
    RightAngles
    @RightAngles

    I think AOC was absent the day they covered this.

    • #2
  3. Mark Camp Member
    Mark Camp
    @MarkCamp

    Concerning this

    ”…in order to succeed, human action must comply not only with what are called the laws of nature, but also with specific laws of human action.”

    this:

    The meaning of this sentence only becomes clear after the rest of the extract is read.

    The kind of human action he’s speaking of is mainly political action or social action, not individual action. You needn’t consider economics when deciding what value (i.e. wealth, goods) to create by your own labor using your own property, for your own future use.)

    • #3
  4. Unsk Member
    Unsk
    @Unsk

    mark: “For the first time people became aware of the fact that, in order to succeed, human action must comply not only with what are called the laws of nature, but also with specific laws of human action.”

    You Betcha!

    Right: I think AOC was absent the day they covered this.

    Unfortunately, I think  these days a huge part of America was absent the day”they” covered this. 

    • #4
  5. DonG (CAGW is a hoax) Coolidge
    DonG (CAGW is a hoax)
    @DonG

    How do you know economists have a sense of humor?  They use decimal points!

     

    What happens when you put 10 economists in a room? You’ll get 11 opinions!

     

    How many economists does it take to change a light bulb? Seven, plus/minus ten!

     

    What’s the difference between an economist and a confused old man with Alzheimer’s? The economist is the one with a calculator!

    • #5
  6. Mark Camp Member
    Mark Camp
    @MarkCamp

    DonG (CAGW is a hoax) (View Comment):
    What happens when you put 10 economists in a room? You’ll get 11 opinions!

    Funny, and true!

    The other three incorrectly refer to “economists”.  I think you meant is what Mises called, in today’s Quote of the Day,  “pseudo-economists.”

    If we had any idea how much unnecessary human suffering was caused, and how much human potential destroyed, by these quacks, we’d still make the same three jokes, but we’d get them right, and they’d be funny.

    • #6
  7. She Reagan
    She
    @She

    Mark Camp: (Quoting LvM) Again and again they embark upon policies that are doomed to failure and fail because they disregard the laws of economics.

    Indeed.  One could take this quote and replace the last three words with a multitude of others (starting with “lessons of history,”) and still have a true statement.

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    • #7
  8. I Walton Member
    I Walton
    @IWalton

    There are basically two broad classes of economics.  Macro and Micro.  Macro is accounting and was invented  or evolved to give people with Macro Ph.Ds  government and academic jobs.  It  was wildly successful at creating demand for macro economists and government employees.  

    Micro in contrast, was mostly theoretical and didn’t provide many government jobs because it described ex post what happens in societies given certain rules.  Micro was insightful but without much pay out for lots of people.   Micro got wrapped up in a set of equations that created the  illusion that it could be figured out and  guided and didn’t get anywhere until a few folks, Friedman in particular, discovered that micro hadn’t made any progress since Adam Smith, but that Adan Smith’s observations were indeed brilliant.  The United States built its economy on Smith, i.e. get some basic rules and then get out of the way, because the organic evolutionary process can’t be predicted.    Modern notions being pushed by Biden folks, government employees and dominant monopolies and oligopolies is that economies can be built and managed by brilliant technocrats and business managers from the top.   It can’t and anyone who thinks it can doesn’t have a clue what Adam Smith was saying and why the modern economy evolved in the United States and will die when we go the same direction as all societies throughout all of history.

    • #8
  9. Flicker Coolidge
    Flicker
    @Flicker

    I Walton (View Comment):

    There are basically two broad classes of economics. Macro and Micro. Macro is accounting and was invented or evolved to give people with Macro Ph.Ds government and academic jobs. It was wildly successful at creating demand for macro economists and government employees.

    Micro in contrast, was mostly theoretical and didn’t provide many government jobs because it described ex post what happens in societies given certain rules. Micro was insightful but without much pay out for lots of people. Micro got wrapped up in a set of equations that created the illusion that it could be figured out and guided and didn’t get anywhere until a few folks, Friedman in particular, discovered that micro hadn’t made any progress since Adam Smith, but that Adan Smith’s observations were indeed brilliant. The United States built its economy on Smith, i.e. get some basic rules and then get out of the way, because the organic evolutionary process can’t be predicted. Modern notions being pushed by Biden folks, government employees and dominant monopolies and oligopolies is that economies can be built and managed by brilliant technocrats and business managers from the top. It can’t and anyone who thinks it can doesn’t have a clue what Adam Smith was saying and why the modern economy evolved in the United States and will die when we go the same direction as all societies throughout all of history.

    Is macro really the accounting of specific details of a leger and micro the broader societal or national economic theory?  That’s the opposite of how I’ve always seen these terms used.  If I understand you correctly.

    • #9
  10. I Walton Member
    I Walton
    @IWalton

    Flicker (View Comment):

    I Walton (View Comment):

    There are basically two broad classes of economics. Macro and Micro. Macro is accounting and was invented or evolved to give people with Macro Ph.Ds government and academic jobs. It was wildly successful at creating demand for macro economists and government employees.

    Micro in contrast, was mostly theoretical and didn’t provide many government jobs because it described ex post what happens in societies given certain rules. Micro was insightful but without much pay out for lots of people. Micro got wrapped up in a set of equations that created the illusion that it could be figured out and guided and didn’t get anywhere until a few folks, Friedman in particular, discovered that micro hadn’t made any progress since Adam Smith, but that Adan Smith’s observations were indeed brilliant. The United States built its economy on Smith, i.e. get some basic rules and then get out of the way, because the organic evolutionary process can’t be predicted. Modern notions being pushed by Biden folks, government employees and dominant monopolies and oligopolies is that economies can be built and managed by brilliant technocrats and business managers from the top. It can’t and anyone who thinks it can doesn’t have a clue what Adam Smith was saying and why the modern economy evolved in the United States and will die when we go the same direction as all societies throughout all of history.

    Is macro really the accounting of specific details of a leger and micro the broader societal or national economic theory? That’s the opposite of how I’ve always seen these terms used. If I understand you correctly.

    The confusion comes because Macro was called economics but just accounts broadly for economic activity. We forced it a into a comprehensive set of equations like micro, but that didn’t change the fact that it was just accounting pretending to have comprehensive behavioral content.    Micro does describe a process with millions of behavioral pieces that change faster than anyone can comprehensively observe.   

    • #10