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Peter1469
12-28-2012, 08:40 PM
http://www.economicnoise.com/2012/12/28/the-keynesian-legacy-unravels/


Keynesian economists believe, regardless of logic and data, that economies can be managed from the top down. In their world, economies are little different than machines. Change some inputs here, speed them up over there, add some lubrication, etc. and the machine will respond in the fashion desired. Output can be “managed” to whatever level needed purely by adjusting the parts of the machine.

Austrian economists on the other hand do not see a machine. They see millions of individuals all making decisions to improve their own lives. The price system provides the coordination among these separate pieces, performing a function no human, supercomputer or government could ever accomplish. For Austrians, economics is a bottom up approach. To effect change, you must change the incentives and disincentives that individual decision makers are afforded.

Carygrant
12-29-2012, 06:42 AM
Suppose that all the "Austrians" are saying is that the first method did not collect data in sufficient detail and with sufficient breadth .
That is , the theory provides an excellent working model , once it is correctly programmed .

But regardless : - those of power and wealth own the means for correct collecting of data and implementing required programme changes .
The last thing you need are ants telling the elephants the best way through the jungle .

Peter1469
12-29-2012, 09:24 AM
Suppose that all the "Austrians" are saying is that the first method did not collect data in sufficient detail and with sufficient breadth .
That is , the theory provides an excellent working model , once it is correctly programmed .

But regardless : - those of power and wealth own the means for correct collecting of data and implementing required programme changes .
The last thing you need are ants telling the elephants the best way through the jungle .

The bolded is in a sense correct, and in another sense incorrect (or rather the point).

Yes, the Keynesian models don't collect enough data to accurately predict the future economy created by economic and monetary policy. But that is the Austrian point- there is too much data for humans (or computers) to properly compute to make useful policy.