YSK How the economic machine works

Ok, so initially Austrian econ and supply-side econ were the same thing then they were different, then Austrian econ was disproved

None of that actually reflects anything I said: what I said was that conservatives tend to believe in both for the same reasons, as Austrian principles are used to justify supply side economics.

now you admit it could be wrong because you can't use empiricism to prove an economic theory. Which is exactly what Austrians believe.

I'm sorry for assuming you understood scientific terms, but what I actually said was that you can't use empiricism to "prove" any hypothesis. That doesn't mean empiricism has no value, or that Austrians are right in rejecting empiricism. We use empirical evidence to help get better understandings of the world. Just because our understanding is not perfect doesn't mean making up theories and insisting they're accurate without evidence is better.

And no, actually, not all Austrians reject empricism. Only those that follow Mises-Rothbard rather than Hayek's work. I happen to think their rejection of empiricism is what gives Austrian economics, and all economics for that matter, a bad name. They can refuse to be scientific if it helps them preserve their ideology, but that doesn't mean other economics should.

You also assume that "too much inequality is bad for the market."

I don't assume that, actually, I look at the evidence and observe the effects of inequality on the market.

In fact, there would be no need for a market if people's needs were all the same. We would just all be communists...but central planning fails precisely because it can't meet the diversity of everyone's needs.

Less financial inequality =/= everyone's needs are the same.

So you hate rich people?

Say something as stupid as this again, and we're done here. I'll leave it to someone else to have their words twisted if that's how they get their kicks.

Then why defend a govt apparatus that grants them monopolies, subsidies and tax favors? Not to mention bailouts?

I'm against those things and want them to stop. They're not integral to the system, they're the form of corruption that takes place in it, just like every other system would have its form of corruption. If I have a brain tumor, I go to the doctor and schedule to have it removed, not chop off my head.

Also, if you really support power distribution, then why give all the power to a small group of politicians? I say (and Austrians say this, too) that we distribute it across millions of people.

Because politicians don't have all the power: wealthy individuals have a lot too. Putting checks and balances on political power and then using it to help the people is the best way to ensure it's not abused. Removing that political power just leaves all the power in the hands of those with the most money. Our political system may not be perfect, but I'll go with the lesser of two evils.

Austrians believe recessions and depressions are extended by govt taxation, and they point to the 1920-21 "forgotten depression" to show what happens when govt lays off. In contrast, the 1929 depression lasted for a decade.

The 1920-1 depression was the direct result of America's shift from a wartime economy to a peacetime one. There were massive distortions in the market due to government policies put in place during the war. Shrinking government was necessary to correct those distortions, but trying to generalize those ideas to every recession or depression requires a lack of understanding in the context and true causes of it in the first place. Also, what happened to not using empiricism to prove economic theories? Cherry picking examples to fit their models and ignoring the others that don't is a big no-no in science, but I guess they don't worry about silly things like that.

You're forgetting the opportunity costs, my friend. What would that money have been spent on, had it not been spent on GPS, internet, etc.?

Probably privately owned patented technology that served to make a very few people incredibly rich. You know, what you said results from public investment :P I like the world where these inventions were free for the public to build their own industries and markets around, thanks.

We can play "what if" all day, but pretending that publicly funded research and investment only benefits the few, as you said, is demonstrably false. It's ideology, not observation of reality.

/r/YouShouldKnow Thread