Galt's Gulch

Add Comment

FORMATTING HELP

All Comments Hide marked as read Mark all as read

    -
  • Posted by dbhalling 12 years, 2 months ago
    This talk brings up some differences between Austrian economics (Von Mises, Hayek, Rothbard) and Ayn Rand. David Kelly has an excellent paper on point http://www.atlassociety.org/hayek-ayn-ra..., but I wanted to discuss the subjectivism inherent in Austrian economics. She was leery of Austrian economics and Libertarianism in part because of this subject basis. In this talk they are very clear that Austrian economics is based on subjectivism, particularly when it comes to the ‘value’ (price) of something. I believe what is called ‘new growth’ economics provides a solution for an objective theory of economics and I hope to be able to present (I have put in a proposal that has not yet been rejected) this at the Atlas Summit this summer. New growth economics makes it clear that all real per capita increases in income are the result of increasing levels of technology. Technology can only increase by creating new technologies, commonly called inventions. While inventions have a physical embodiment, they are mainly the product of the mind. This is consistent with Rand – namely that man’s main or distinguishing tool of survival is man’s mind. Inventions do not just have value in a ‘social’ context, but are valuable even to a Robinson Crusoe. If you therefore define economics as the study of how man acquires the things necessary for his survival, then you divorce it from just trade or social interaction and provide an objective basis for economics. In addition, you provide an object basis for the value (price) of an item. For instance, if you have plenty of fish but are on the edge of dying from exposure the value (price) of fish is low for you, while the value of shelter is high. Now you don’t set the price of shelter and fish by yourself, but you have an objective criteria for deciding how many fish you will give up for shelter.

    Now this aligns itself with Rand’s moral philosophy and it provides an objective basis for economics. Particularly for what I consider the most important question is economics, which is what causes real per capita increase in income. It also shows why Rand considered patents the most important and fundamental property right. The recognition of property rights in inventions corresponds with the escape of large groups of people from the Malthusian Trap (living on the edge or threat of starvation) and it also explains why the Industrial Revolution started in England as opposed to France or many other countries, it also explains why the US overtook England as the center of the Industrial Revolution. It also explains when Japan escaped the Malthusian Trap.
    Reply | Mark as read | Best of... | Permalink  
      -
    • Posted by Lucky 12 years, 2 months ago
      db- I hope you will make that paper available, eg by a link from here.
      Are you familiar with the 2008 paper of Paul Cwik 'Is There Room for Intellectual Property Rights in Austrian Economics' ?
      It is nearly as long as Kelly's. (I have an attention span of 2.5 pages and 4 minutes).
      Going back to your theme 'all real per capita increases in income are the result of increasing levels of technology', will you be considering working harder, working smarter, managerial effectiveness, operations research, motivation and training?
      Reply | Mark as read | Parent | Best of... | Permalink  
      • Posted by dbhalling 12 years, 2 months ago
        Lucky I am intimately familiar with the thoughts of Kinsella. His idea that property rights are a social construct designed to deal with scarcity is nonsense. This is not the historical basis of property rights, logically it fails to explain why any particular person owns any specific property, and it is just wrong that patents and copyrights are not subject to scarcity. Kinsella is an intellectual fraud.
        Reply | Mark as read | Parent | Best of... | Permalink  
      • Posted by dbhalling 12 years, 2 months ago
        Thanks for the paper, I will look it up. I have had a number of fights with Austrians.

        When I finish the paper I will be happy to post it here. I have written somewhat related posts on my blog.

        I am not quite sure about your question. I divide all human creations into those with an objective result (repeatable, scientifically objective) and a subjective result (art). For instance, an incandescent light bulb always puts out light when electricity of a certain voltage and current is applied - objective result. The effect of the novel Atlas Shrugged may be nothing, may spur people to action, may inspire disgust - subjective result. Only inventions result in real per capita increases in wealth. For instance, if I work longer/harder there is a limit to the time in a day and the endurance of my body. The increase is bounded and relatively small. On the other hand the year before the cotton gin was created the US produced about 4000 bales of cotton a year. Ten years later the US was producing 400000 bales of cotton a year and almost all of that was the result of the invention of the cotton gin. Only inventions can give you that sort of increase in wealth.
        Reply | Mark as read | Parent | Best of... | Permalink  

FORMATTING HELP

  • Comment hidden. Undo