Funny rap. About economics. I didnt know that was possible :)
Sometimes I wish I studied national economics instead of medicine.. I find these things so damned interesting. Might take a course or three in it anyway for ###### and giggles!
<!--quoteo(post=1768964:date=Apr 28 2010, 11:47 AM:name=tjosan)--><div class='quotetop'>QUOTE (tjosan @ Apr 28 2010, 11:47 AM) <a href="index.php?act=findpost&pid=1768964"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->Funny rap. About economics. I didnt know that was possible :)
Sometimes I wish I studied national economics instead of medicine.. I find these things so damned interesting. Might take a course or three in it anyway for ###### and giggles!<!--QuoteEnd--></div><!--QuoteEEnd-->
As you know, economics is as controversial as politics... a course at one university may be completely different in philosophy from a course at another. But I would start with this <a href="http://mises.org/literature.aspx" target="_blank">literature</a>... tons of great works are available there.
There are study guides you can download there too, to go along with the classics, as I see them. For example, <a href="http://mises.org/books/humanactionstudy.pdf" target="_blank">Human Action</a>.
<a href="http://mises.org/media.aspx" target="_blank">Lecture series</a> are available as well.
Good luck. Be sure to expose yourself to more than one viewpoint if you do decide to study some economics as a hobby. I know that one of my favorite all-time quotes comes from economics: from Hayek's Nobel Lecture, "The Pretense of Knowledge," and it applies to much more than just calculating sticky wages.
I've read a lot about this subject and I'll give you the most definitive criticism of Austrians since Caplan!
First of all, I must say from student of IT engineering point of view, this is way too much filled with <a href="http://www.overcomingbias.com/" target="_blank">Intellectual Bias</a> and ideological fanaticism. I see same kind of lack of objective thinking in "OS arguments", that is, people who think Linux/Windows/Mac/Open-Source are better for everything etc. They look into benefits of their OS-approach completely ignoring the drawbacks.
I'm very skeptical to this fanatical <i>apriorism</i> and hate of mathematics in human action that austrians endorse. I doubt anyone who endorses praxaelogy to the amount of Mises actually uses this in real life. To give you an example, in software programming, there're different programing paradigms. <a href="http://en.wikipedia.org/wiki/Declarative_programming" target="_blank">Declarative programming</a>, and its most radical approach <a href="http://en.wikipedia.org/wiki/DRY" target="_blank">DRY</a>, are great concepts but shouldn't take to the maximum or you'll never reach deadlines. To give you another example, in software programming, you can use logic and reasoning to analyze your performance problems or you can use past data with statistics. But unfortunately some programmers are too stubborn to learn mathematics. There was an article on Slashdot recently about this. IPR is another good example. When you don't accept math in human action, you cannot use <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=980509" target="_blank">game theory</a> to make some reasonable analysis. The main problem is that there's no real feedback system in politics like there's price system in economics (futurarchy sounds nice idea but probably won't work in practice) to filter out all nonsense. Too much room for necons and alike.
While ABCT is an interesting theory (there're even several empirical studies supporting it, one which I found with my UNI's souce search), I have really hard time believing it explains recent crisis. First of all, anyone knows micro-level irrationality is possible. This means macro-level irranationality is possible aswell. Some austrians think its just not possible just because "Mises says so". Or rather they think there's nothing governement can do to stop it (knowledge problem). This is a, I believe, a false assumption. Scandinavian countries, with strong financial regulations never had big financial sector meltdown, aswell as Canada (a bit worse). An exception to scandinavian countries is Iceland which had a recent history of deregulation and now they're in a big, big mess. This goes for <a href="http://www.nytimes.com/2010/03/08/opinion/08krugman.html" target="_blank">Ireland</a>. Ireland is a lot better example because there were no such things like CRA, Freddie and Fannie that chicagonites can run under. To give you another example, there was a big ponzi-type of fraud something like a year ago in my country, and I'm pretty sure it'd have caused mayhem if it were in actual financial markets, and don't tell me government can do nothing to stop ponzi-schemes.
I've also got a problem with these axiomatic ethics. You can see it right from the Mises Daylies (which btw. repeat themselves after a month). When it comes to distributional problems, they stick to either Rothbard's welfare argument (which btw. Bryan Caplan refuted) or their <a href="http://en.wikipedia.org/wiki/Non-aggression_principle" target="_blank">NAP</a>-type arguments, but realize these doesn't work so well in IPR or similar stuff. To have any interesting debate, you have to use consequential ethics to prove a point. Many libertarians suddenly become utilitarians when it comes to IPR.
And what comes to gold standard. There's a good reason not to support it, and its deflation (general drop in prices) due hoarding. I've talked about this with an austrian who helped writing Ron Paul's book and he doesn't deny it. You've to understand <a href="http://mises.org/journals/scholar/salerno.pdf" target="_blank">4 types of deflation</a> to understand the argument (part of deflation is good, especially the one due increase in supply of goods which happened in electronics). They're not the same. Deflation due money demand inflexibility <i>does</i> increase real interest rates. Basically this means that under gold standard, a mortage would cost much, much more. You'd have to pay bigger interest. But that's not the only problem. The 2nd problem is that hoarding money would be beneficial because its value would rise, meaning investment would go down because it'd be more risk efficient to put money under mattress than to invest in something. Austrians have two anti-intellectual tricks around this. First is to say that ecnomics is about fullfilling the needs of people and so deflation is oke and 2nd I'll explain in paragraph below.
I can give an example about deflation. Suppose annual deflation is unbelievable and unrealistic 50%. Joe has 100c of money and the price of grapes is 100 on year 2000, and the price of a bottle of wine is 400c. On year 2001, the price of grapes is 50c and the price of a bottle of wine is 200c. By hoarding, Joe's effective purchasing power increases from 1/4 of a bottle of wine to 1/2 without doing anything. Investing in a wine company (or starting one) by buying grapes in 2000 with 100c and selling a bottle of wine at the price of 200c in 2001 increases Joe's purchasing power from 1/4th in 2000 to 1 in 2001. And that's great (and this is where austrians stop) but <i>without deflation</i> Joe's purchasing power would not increase at all, but by investing to a wine company Joe's purchasing power would rise from 1/4th of a bottle to 1 bottle. Now guess under which model you'll have more incencitives to invent? Indeed you make loss by just investing, not to mention there's a risk in investing involved. Because of this, under gold standard, we might not have even Internet developed. Fiat money is okay unless you're fanatic and believe no central bank learned from Weimar's republic or Zimbabe, then there's no problem. This is why ECB had rather conservative monetary policy during the crisis. Besides, people who believe in individual choice shouldn't think yellow shiny metal is a perfect choice for everyone. :-)
In case you wan't some other real criticism, you should read <a href="http://blog.mises.org/841/caplan-and-responses/" target="_blank">Bryan Caplan's argument with Walter Block</a>. Best part is when Rothbard says something as intelligent as probability mathematics can only be applied to "games of cards".
Milton Friedman is a lot better quote generator than Hayek or Mises. That man had some awesome charisma: "The government solution to a problem is usually as bad as the problem." – <i>Milton Friedman</i>
Don't get me wrong. I think austrians still have lots of useful things to say (and moreover they've distributed all their books and media), even though I think Mises.org is full of ideological crazies.
What I really agree with libertarians is decentralized power. If states would have more power, you could have more competition between systems (both health care and financial). Libertarians have lots of rational and wise stuff to stay but it doesn't prevent from a sensible person to have an objective approach to reality instead of axiomatic ethics.
<a href="http://econlog.econlib.org/" target="_blank">EconLog</a> is an a very good blog by Bryan Caplan and some other economic professors for anyone interested.
puzlThe Old FirmJoin Date: 2003-02-26Member: 14029Retired Developer, NS1 Playtester, Forum Moderators, Constellation
Jiriki, I'm not sure Austrians claim that their model encourages more investment or less hoarding. I think the fundamental point is that monetary deflation due to cheap credit/whatever will certainly encourage investment and economic growth BUT will eventually lead to a bust cycle as real values underpinning the actual economic activity drags everything back to reality. At least, that's how I understand it anyway.
<!--quoteo(post=1768924:date=Apr 28 2010, 10:49 AM:name=tjosan)--><div class='quotetop'>QUOTE (tjosan @ Apr 28 2010, 10:49 AM) <a href="index.php?act=findpost&pid=1768924"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->I'd argue that while this issue of debt and inflation that you've been discussing certainly has it's place, an equally or more important problem is the abandonment of a full employment policy.<!--QuoteEnd--></div><!--QuoteEEnd--> It's a complex affair as it is with most things, my idea was to introduce people to it in simple terms. You'd think it would be of some importance to learn about those paper things we waste least generously half of our lives on, but more so because there are a few things about it that have good potential to turn one's understanding of modern life upside-down.
Employment in general is one of the many implications of how modern system works: it doesn't start from how much every man has to earn to survive or support "economic" growth, but from how little a company can pay to profit. Quite simply, if it isn't profitable, it won't be done.
Oh and, the reason for putting "economic" in quotes here would be the fact that it's one of the most ambiguous and meaningless terms in existence. It needs no more than a cursory glance to understand it, but we never really even bother with that.
<!--quoteo(post=1769261:date=Apr 30 2010, 02:04 PM:name=Jiriki)--><div class='quotetop'>QUOTE (Jiriki @ Apr 30 2010, 02:04 PM) <a href="index.php?act=findpost&pid=1769261"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->Now guess under which model you'll have more incencitives to invent? Indeed you make loss by just investing, not to mention there's a risk in investing involved. Because of this, under gold standard, we might not have even Internet developed.<!--QuoteEnd--></div><!--QuoteEEnd--> The thing that's easy to miss, and also the thing that flips the picture upside down, is the issue of credit.
Hoarding is perfectly possible under either backed or fiat systems, and likewise writing off credit is perfectly possible under either. Quite simply, when you introduce credit - paper notes, electronic notes, checks, IOUs, etc. - whether it's backed by some commodity or not, you have the potential for infinite manipulation of it's quantity and value in any manner desired, through physical manipulation or plain old speculation.
Unless you have some system to ensure credit is represented objectively 100% of the time - which would halt both inflation and deflation due to non-production causes, by the way - they are virtually the same.
<!--quoteo(post=1769272:date=Apr 30 2010, 05:03 PM:name=tjosan)--><div class='quotetop'>QUOTE (tjosan @ Apr 30 2010, 05:03 PM) <a href="index.php?act=findpost&pid=1769272"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->Sources please! I cant find anything in Swedish medias.<!--QuoteEnd--></div><!--QuoteEEnd--> Nothing yet, still waiting for confirmation. Don't bother looking for it in the media though, turning points are never televised until it's too late.
<!--quoteo(post=1769272:date=Apr 30 2010, 05:03 PM:name=tjosan)--><div class='quotetop'>QUOTE (tjosan @ Apr 30 2010, 05:03 PM) <a href="index.php?act=findpost&pid=1769272"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->And collapsed in what way<!--QuoteEnd--></div><!--QuoteEEnd--> Mass deflation due to physical insolvency of multiple countries and currencies, possible hyperinflation in event of classic counter-action. Or at least as far as logic goes, which modern monetary system does not at all have to follow due to excess manipulation.
If there's anything to be afraid of, it's proposed solutions for the crisis rather than crisis itself.
<!--quoteo(post=1769277:date=Apr 30 2010, 05:29 PM:name=puzl)--><div class='quotetop'>QUOTE (puzl @ Apr 30 2010, 05:29 PM) <a href="index.php?act=findpost&pid=1769277"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->Where did you hear about the eurozone collapse Drako?<!--QuoteEnd--></div><!--QuoteEEnd--> I didn't hear it from any particular source, it's my impression of what's going on in general (hence, "looks like").
Like I said, I'm still still waiting for confirmation from any source; there are a <a href="http://www.youtube.com/watch?v=rbXwe0HZFH0" target="_blank">few</a> contenders, but nothing reliable yet. Again, don't take my word for it, I just felt I had to sound off on this.
<!--quoteo(post=1769277:date=Apr 30 2010, 05:29 PM:name=puzl)--><div class='quotetop'>QUOTE (puzl @ Apr 30 2010, 05:29 PM) <a href="index.php?act=findpost&pid=1769277"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->Drop the tinfoil hat<!--QuoteEnd--></div><!--QuoteEEnd--> That's an interesting reaction. We've just been hit by global recession not a few months ago, did everyone forget already?..
<!--quoteo(post=1769261:date=Apr 30 2010, 12:04 PM:name=Jiriki)--><div class='quotetop'>QUOTE (Jiriki @ Apr 30 2010, 12:04 PM) <a href="index.php?act=findpost&pid=1769261"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->I'm very skeptical to this fanatical <i>apriorism</i> and hate of mathematics in human action that austrians endorse. I doubt anyone who endorses praxaelogy to the amount of Mises actually uses this in real life. To give you an example, in software programming, there're different programing paradigms. <a href="http://en.wikipedia.org/wiki/Declarative_programming" target="_blank">Declarative programming</a>, and its most radical approach <a href="http://en.wikipedia.org/wiki/DRY" target="_blank">DRY</a>, are great concepts but shouldn't take to the maximum or you'll never reach deadlines. To give you another example, in software programming, you can use logic and reasoning to analyze your performance problems or you can use past data with statistics. But unfortunately some programmers are too stubborn to learn mathematics. There was an article on Slashdot recently about this. IPR is another good example. When you don't accept math in human action, you cannot use <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=980509" target="_blank">game theory</a> to make some reasonable analysis.<!--QuoteEnd--></div><!--QuoteEEnd-->
How in the nine hells can you be a programmer and not a mathematician? Mathematics are required for programming because programming is telling computers how to do maths.
For that matter how on earth can you go through modern school and not pick up some appreciation for maths? I'm not even very good at it but I still get how important and useful it is.
<!--quoteo(post=1769286:date=Apr 30 2010, 07:20 PM:name=Chris0132)--><div class='quotetop'>QUOTE (Chris0132 @ Apr 30 2010, 07:20 PM) <a href="index.php?act=findpost&pid=1769286"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->How in the nine hells can you be a programmer and not a mathematician?<!--QuoteEnd--></div><!--QuoteEEnd--> Depends on the field, really. Programming in general is closer to translating than anything else, except the language you're trying to speak is made of аss.
<!--quoteo(post=1769286:date=Apr 30 2010, 07:20 PM:name=Chris0132)--><div class='quotetop'>QUOTE (Chris0132 @ Apr 30 2010, 07:20 PM) <a href="index.php?act=findpost&pid=1769286"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->For that matter how on earth can you go through modern school and not pick up some appreciation for maths? I'm not even very good at it but I still get how important and useful it is.<!--QuoteEnd--></div><!--QuoteEEnd--> Modern educational system has a knack for killing off appreciation and curiosity for absolutely any subject, consider yourself a lucky exception. Myself, I went in adoring math, I left hating it to the its last rotten bone.
I went in not really knowing maths and came out slightly more aware of how little maths I know, and also knowing I didn't want to know anything about it.
On the flipside I went in good at english, left better at english, but with a profound hatred of any poetry written after 1900 and any literature written before 1800, I still like english and language in general though.
That doesn't mean I don't appreciate what it can do though, although perhaps that's more science than anything, I went in knowing some science because I read encyclopedias as a child, and left knowing an awful lot about how plants reproduce because that was on the syllabus every year, and also later on I learned how everything else reproduces and how their component parts reproduce and a vague feeling that biologists in general have a bit too much time on their hands. Oh and I also learned that I can't do chemistry because I can't see what colour the universal indicator is.
Not liking a subject surely doesn't prevent you from appreciating its power. I'm a games artist and I can't/hate to have to program but a good programmer is worth his weight in gold because without one I can't model either. Programming is arguably the superor discipline because basic art can be learned easily enough and with that a programmer can make an awful lot of games, but without programming none of my discipline is any use, and most of it is impossible because programmers make all my tools.
You should be congratulated on keeping appreciation for knowledge in spite of your education. It's far from an easy feat.
I doubt I would know or appreciate anything at all without Internet myself - Wikipedia loop is easily the most salient illustration of how fun learning can actually be, by the way - come to think of it, I spent an awful lot of time *correcting* what I learned in school: we still had primordial soup theory, static universe and pre-informational economy, good grief...
I enjoy commentary on investment and the holding of sale or purchasing of goods for when the 'time is right', when for most of human history 90% of the people had to spend their income immediately for the most part and there was no investment or savings for most people.
<!--quoteo(post=1769657:date=May 4 2010, 04:37 PM:name=snooggums)--><div class='quotetop'>QUOTE (snooggums @ May 4 2010, 04:37 PM) <a href="index.php?act=findpost&pid=1769657"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->I enjoy commentary on investment and the holding of sale or purchasing of goods for when the 'time is right', when for most of human history 90% of the people had to spend their income immediately for the most part and there was no investment or savings for most people.<!--QuoteEnd--></div><!--QuoteEEnd--> It's much more true today than it ever was, due to rapid inflation/taxes, high costs/spending and low interest rates: saving in general will result in a loss, and it compares unfavorably to just taking a loan anyway, and that's even assuming you can save in the first place.
If people or businesses could just save, banks would be out of business. Indeed the economy at large would halt if we didn't use the money we don't have to buy things we don't need: goods that we do actually need - food, water, shelter, (porn?) - are universally available already for most.
<!--quoteo(post=1769660:date=May 4 2010, 03:56 PM:name=Draco_2k)--><div class='quotetop'>QUOTE (Draco_2k @ May 4 2010, 03:56 PM) <a href="index.php?act=findpost&pid=1769660"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->It's much more true today than it ever was, due to rapid inflation/taxes, high costs/spending and low interest rates: saving in general will result in a loss, and it compares unfavorably to just taking a loan anyway, and that's even assuming you can save in the first place.
If people or businesses could just save, banks would be out of business. Indeed the economy at large would halt if we didn't use the money we don't have to buy things we don't need: goods that we do actually need - food, water, shelter, (porn?) - are universally available already for most.<!--QuoteEnd--></div><!--QuoteEEnd-->
Wouldn't it just be the business of making and selling things we dont need for money we dont have that would halt? We'd still have a specialised economy of making the essentials, and the tools to make those essentials and construct the infrastructure etcetc. I think that argument is pretty weak.
<!--quoteo(post=1769666:date=May 4 2010, 06:40 PM:name=Chris0132)--><div class='quotetop'>QUOTE (Chris0132 @ May 4 2010, 06:40 PM) <a href="index.php?act=findpost&pid=1769666"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->Save as in keep all the money in your underwear drawer or save as in put it in the bank but don't loan?<!--QuoteEnd--></div><!--QuoteEEnd--> Technically same thing.
<!--quoteo(post=1769670:date=May 4 2010, 07:20 PM:name=tjosan)--><div class='quotetop'>QUOTE (tjosan @ May 4 2010, 07:20 PM) <a href="index.php?act=findpost&pid=1769670"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->Wouldn't it just be the business of making and selling things we dont need for money we dont have that would halt? We'd still have a specialised economy of making the essentials, and the tools to make those essentials and construct the infrastructure etcetc. I think that argument is pretty weak.<!--QuoteEnd--></div><!--QuoteEEnd--> Everyone has to pay their bills. Today only a meager few people are involved in or required for productions that actually matter - food, water, structures, machines, knowledge, etc. - and in that scenario only they would be able to earn and thus afford anything. Rest of the world would be paradoxically left starving among over-abundance of food (as it is today, incidentally, although in another fashion).
The economic exchange mechanism had worked relatively well in the past because for the longest time most of our economy was exactly based on those "essentials", offer only rarely catching up to demand, but the modern speed of economic process coupled with huge technological leaps lead the system to substituting real demand for artificial one once the prior was satiated.
Trade cannot survive without continuous and increasing consumption, which is not a physical possibility on any level. We've crossed the line of real value already - which is why today's economy is based on generating demand rather than seeking to satisfy existing one - the moment we cross the line of real available resources is when it'll be too late to fix anything.
Oh but surely there are better things we can do than produce useless things. This is one of the reasons I can't see the issue with healthcare and school systems that grows as % of BNP for other reasons than inefficiency.
If we under this system only can survive as a community (or society) by producing useless things to keep the economy going then we do things the wrong way. It's a simple matter of allocation of resources and if the current system doesn't allow for it then we change the system to accomodate for our needs. Why for example should we allow 10-20% of the population to be out of work and on wellfare (because of a lack of need for them in the production) when they could be 'employed' in the educational system or to.. hell I don't know, grow vegetables ecologically in urban farming.
As someone very wise once wrote, and I paraphrase (of course), all economy is time economy.
<!--quoteo(post=1769697:date=May 4 2010, 11:25 PM:name=tjosan)--><div class='quotetop'>QUOTE (tjosan @ May 4 2010, 11:25 PM) <a href="index.php?act=findpost&pid=1769697"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->Oh but surely there are better things we can do than produce useless things.<!--QuoteEnd--></div><!--QuoteEEnd--> Better, yes. More profitable, no. Profit is the name of the game.
<!--quoteo(post=1769697:date=May 4 2010, 11:25 PM:name=tjosan)--><div class='quotetop'>QUOTE (tjosan @ May 4 2010, 11:25 PM) <a href="index.php?act=findpost&pid=1769697"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->If we under this system only can survive as a community (or society) by producing useless things to keep the economy going then we do things the wrong way. It's a simple matter of allocation of resources and if the current system doesn't allow for it then we change the system to accomodate for our needs. Why for example should we allow 10-20% of the population to be out of work and on wellfare (because of a lack of need for them in the production) when they could be 'employed' in the educational system or to.. hell I don't know, grow vegetables ecologically in urban farming.<!--QuoteEnd--></div><!--QuoteEEnd--> I couldn't agree more.
It's not exactly a hard realization either, we all ultimately think of economy as a way of distributing resources for good of everyone, or at the very least ourselves. Once you try to connect the threads from this notion to reality of the matter however, you quickly realize that just isn't what it's doing.
<!--quoteo(post=1769673:date=May 4 2010, 05:54 PM:name=Draco_2k)--><div class='quotetop'>QUOTE (Draco_2k @ May 4 2010, 05:54 PM) <a href="index.php?act=findpost&pid=1769673"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->Technically same thing.<!--QuoteEnd--></div><!--QuoteEEnd-->
Well my underwear drawer doesn't magically grow more money at a rate of 0.5% the cash I have in there, and my underwear drawer also doesn't exist in hyperspace and let me take money out of it at any one of a number of hyperspace portals dotted conveniently around areas with high concentrations of shops, or by using a magical bit of plastic with arcane symbols engraved on it.
If it did though I probably would keep it in my underwear drawer.
<!--quoteo(post=1769834:date=May 5 2010, 05:28 PM:name=Chris0132)--><div class='quotetop'>QUOTE (Chris0132 @ May 5 2010, 05:28 PM) <a href="index.php?act=findpost&pid=1769834"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->Well my underwear drawer doesn't magically grow more money at a rate of 0.5% the cash I have in there, and my underwear drawer also doesn't exist in hyperspace and let me take money out of it at any one of a number of hyperspace portals dotted conveniently around areas with high concentrations of shops, or by using a magical bit of plastic with arcane symbols engraved on it.<!--QuoteEnd--></div><!--QuoteEEnd--> Obvious differences aside, of course. In the context of saving as means of finance, they're practically the same.
<!--quoteo(post=1769268:date=Apr 30 2010, 08:35 AM:name=Draco_2k)--><div class='quotetop'>QUOTE (Draco_2k @ Apr 30 2010, 08:35 AM) <a href="index.php?act=findpost&pid=1769268"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->Looks like the Eurozone has collapsed. Still waiting on confirmation.
I suggest checking it out for yourself, this is the "Whoops, we're out of food and water" kind of thing if it's really come to this.
EDIT: Definitely don't take my word for it. Don't look in the mass media either, they don't have the capacity to cover such things.<!--QuoteEnd--></div><!--QuoteEEnd-->
QFT - nice job Draco, clue me in on your tinfoil hat design as I'm lookin to upgrade
actually there have been some mutterings from the ECB that the countries south of the alps cant hold their own, which would threaten the stability of the euro.
Of course this doesnt mean the euro zone will collapse, just that greece and some other countries will go second and a half world.
Well, the media are currently crying wolf about Euro collapse over what's going on in Greece, but I wouldn't take this as confirmation of anything other than sensationalism yet. Greece is doing far better than a couple dozen other countries right now, I think Iceland went technically bankrupt a few months ago...
Some outlets are reporting Eurozone Central Bank is looking into expanding their powers under pretense of helping, that's definitely not a good thing at all.
<!--quoteo(post=1770068:date=May 7 2010, 07:45 PM:name=tjosan)--><div class='quotetop'>QUOTE (tjosan @ May 7 2010, 07:45 PM) <a href="index.php?act=findpost&pid=1770068"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->actually there have been some mutterings from the ECB that the countries south of the alps cant hold their own, which would threaten the stability of the euro.<!--QuoteEnd--></div><!--QuoteEEnd--> Would you have some leads on that?..
Actually the central bank governor of Poland was the only one of the EU to oppose exposing their currency to Euro weakness. But he died in that plane crash so no worries. He should have known what happens when you <a href="http://grandcoalitionremix.ytmnd.com/" target="_blank">forget about Poland</a>.
Comments
<a href="http://mises.org/daily/4095" target="_blank">The Brilliance of That Hayek vs. Keynes Rap</a>
Be sure to watch the video first if you haven't seen it, it's highly entertaining.
Sometimes I wish I studied national economics instead of medicine.. I find these things so damned interesting. Might take a course or three in it anyway for ###### and giggles!
Sometimes I wish I studied national economics instead of medicine.. I find these things so damned interesting. Might take a course or three in it anyway for ###### and giggles!<!--QuoteEnd--></div><!--QuoteEEnd-->
As you know, economics is as controversial as politics... a course at one university may be completely different in philosophy from a course at another. But I would start with this <a href="http://mises.org/literature.aspx" target="_blank">literature</a>... tons of great works are available there.
There are study guides you can download there too, to go along with the classics, as I see them. For example, <a href="http://mises.org/books/humanactionstudy.pdf" target="_blank">Human Action</a>.
<a href="http://mises.org/media.aspx" target="_blank">Lecture series</a> are available as well.
Good luck. Be sure to expose yourself to more than one viewpoint if you do decide to study some economics as a hobby. I know that one of my favorite all-time quotes comes from economics: from Hayek's Nobel Lecture, "The Pretense of Knowledge," and it applies to much more than just calculating sticky wages.
[Edit] That Human Action Study thing though just got on my nerves. Arrr... only polemics and quite opposite of what I believe.
And how come everyone from the chicago school and manhattan institute all say the same thing?!
First of all, I must say from student of IT engineering point of view, this is way too much filled with <a href="http://www.overcomingbias.com/" target="_blank">Intellectual Bias</a> and ideological fanaticism. I see same kind of lack of objective thinking in "OS arguments", that is, people who think Linux/Windows/Mac/Open-Source are better for everything etc. They look into benefits of their OS-approach completely ignoring the drawbacks.
I'm very skeptical to this fanatical <i>apriorism</i> and hate of mathematics in human action that austrians endorse. I doubt anyone who endorses praxaelogy to the amount of Mises actually uses this in real life. To give you an example, in software programming, there're different programing paradigms. <a href="http://en.wikipedia.org/wiki/Declarative_programming" target="_blank">Declarative programming</a>, and its most radical approach <a href="http://en.wikipedia.org/wiki/DRY" target="_blank">DRY</a>, are great concepts but shouldn't take to the maximum or you'll never reach deadlines. To give you another example, in software programming, you can use logic and reasoning to analyze your performance problems or you can use past data with statistics. But unfortunately some programmers are too stubborn to learn mathematics. There was an article on Slashdot recently about this. IPR is another good example. When you don't accept math in human action, you cannot use <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=980509" target="_blank">game theory</a> to make some reasonable analysis. The main problem is that there's no real feedback system in politics like there's price system in economics (futurarchy sounds nice idea but probably won't work in practice) to filter out all nonsense. Too much room for necons and alike.
While ABCT is an interesting theory (there're even several empirical studies supporting it, one which I found with my UNI's souce search), I have really hard time believing it explains recent crisis. First of all, anyone knows micro-level irrationality is possible. This means macro-level irranationality is possible aswell. Some austrians think its just not possible just because "Mises says so". Or rather they think there's nothing governement can do to stop it (knowledge problem). This is a, I believe, a false assumption. Scandinavian countries, with strong financial regulations never had big financial sector meltdown, aswell as Canada (a bit worse). An exception to scandinavian countries is Iceland which had a recent history of deregulation and now they're in a big, big mess. This goes for <a href="http://www.nytimes.com/2010/03/08/opinion/08krugman.html" target="_blank">Ireland</a>. Ireland is a lot better example because there were no such things like CRA, Freddie and Fannie that chicagonites can run under. To give you another example, there was a big ponzi-type of fraud something like a year ago in my country, and I'm pretty sure it'd have caused mayhem if it were in actual financial markets, and don't tell me government can do nothing to stop ponzi-schemes.
I've also got a problem with these axiomatic ethics. You can see it right from the Mises Daylies (which btw. repeat themselves after a month). When it comes to distributional problems, they stick to either Rothbard's welfare argument (which btw. Bryan Caplan refuted) or their <a href="http://en.wikipedia.org/wiki/Non-aggression_principle" target="_blank">NAP</a>-type arguments, but realize these doesn't work so well in IPR or similar stuff. To have any interesting debate, you have to use consequential ethics to prove a point. Many libertarians suddenly become utilitarians when it comes to IPR.
And what comes to gold standard. There's a good reason not to support it, and its deflation (general drop in prices) due hoarding. I've talked about this with an austrian who helped writing Ron Paul's book and he doesn't deny it. You've to understand <a href="http://mises.org/journals/scholar/salerno.pdf" target="_blank">4 types of deflation</a> to understand the argument (part of deflation is good, especially the one due increase in supply of goods which happened in electronics). They're not the same. Deflation due money demand inflexibility <i>does</i> increase real interest rates. Basically this means that under gold standard, a mortage would cost much, much more. You'd have to pay bigger interest. But that's not the only problem. The 2nd problem is that hoarding money would be beneficial because its value would rise, meaning investment would go down because it'd be more risk efficient to put money under mattress than to invest in something. Austrians have two anti-intellectual tricks around this. First is to say that ecnomics is about fullfilling the needs of people and so deflation is oke and 2nd I'll explain in paragraph below.
I can give an example about deflation. Suppose annual deflation is unbelievable and unrealistic 50%. Joe has 100c of money and the price of grapes is 100 on year 2000, and the price of a bottle of wine is 400c. On year 2001, the price of grapes is 50c and the price of a bottle of wine is 200c. By hoarding, Joe's effective purchasing power increases from 1/4 of a bottle of wine to 1/2 without doing anything. Investing in a wine company (or starting one) by buying grapes in 2000 with 100c and selling a bottle of wine at the price of 200c in 2001 increases Joe's purchasing power from 1/4th in 2000 to 1 in 2001. And that's great (and this is where austrians stop) but <i>without deflation</i> Joe's purchasing power would not increase at all, but by investing to a wine company Joe's purchasing power would rise from 1/4th of a bottle to 1 bottle. Now guess under which model you'll have more incencitives to invent? Indeed you make loss by just investing, not to mention there's a risk in investing involved. Because of this, under gold standard, we might not have even Internet developed. Fiat money is okay unless you're fanatic and believe no central bank learned from Weimar's republic or Zimbabe, then there's no problem. This is why ECB had rather conservative monetary policy during the crisis. Besides, people who believe in individual choice shouldn't think yellow shiny metal is a perfect choice for everyone. :-)
In case you wan't some other real criticism, you should read <a href="http://blog.mises.org/841/caplan-and-responses/" target="_blank">Bryan Caplan's argument with Walter Block</a>. Best part is when Rothbard says something as intelligent as probability mathematics can only be applied to "games of cards".
Milton Friedman is a lot better quote generator than Hayek or Mises. That man had some awesome charisma:
"The government solution to a problem is usually as bad as the problem." – <i>Milton Friedman</i>
Don't get me wrong. I think austrians still have lots of useful things to say (and moreover they've distributed all their books and media), even though I think Mises.org is full of ideological crazies.
What I really agree with libertarians is decentralized power. If states would have more power, you could have more competition between systems (both health care and financial). Libertarians have lots of rational and wise stuff to stay but it doesn't prevent from a sensible person to have an objective approach to reality instead of axiomatic ethics.
<a href="http://econlog.econlib.org/" target="_blank">EconLog</a> is an a very good blog by Bryan Caplan and some other economic professors for anyone interested.
I suggest checking it out for yourself, this is the "Whoops, we're out of food and water" kind of thing if it's really come to this.
EDIT: Definitely don't take my word for it. Don't look in the mass media either, they don't have the capacity to cover such things.
And collapsed in what way
It's a complex affair as it is with most things, my idea was to introduce people to it in simple terms. You'd think it would be of some importance to learn about those paper things we waste least generously half of our lives on, but more so because there are a few things about it that have good potential to turn one's understanding of modern life upside-down.
Employment in general is one of the many implications of how modern system works: it doesn't start from how much every man has to earn to survive or support "economic" growth, but from how little a company can pay to profit. Quite simply, if it isn't profitable, it won't be done.
Oh and, the reason for putting "economic" in quotes here would be the fact that it's one of the most ambiguous and meaningless terms in existence. It needs no more than a cursory glance to understand it, but we never really even bother with that.
<!--quoteo(post=1769261:date=Apr 30 2010, 02:04 PM:name=Jiriki)--><div class='quotetop'>QUOTE (Jiriki @ Apr 30 2010, 02:04 PM) <a href="index.php?act=findpost&pid=1769261"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->Now guess under which model you'll have more incencitives to invent? Indeed you make loss by just investing, not to mention there's a risk in investing involved. Because of this, under gold standard, we might not have even Internet developed.<!--QuoteEnd--></div><!--QuoteEEnd-->
The thing that's easy to miss, and also the thing that flips the picture upside down, is the issue of credit.
Hoarding is perfectly possible under either backed or fiat systems, and likewise writing off credit is perfectly possible under either. Quite simply, when you introduce credit - paper notes, electronic notes, checks, IOUs, etc. - whether it's backed by some commodity or not, you have the potential for infinite manipulation of it's quantity and value in any manner desired, through physical manipulation or plain old speculation.
Unless you have some system to ensure credit is represented objectively 100% of the time - which would halt both inflation and deflation due to non-production causes, by the way - they are virtually the same.
<!--quoteo(post=1769272:date=Apr 30 2010, 05:03 PM:name=tjosan)--><div class='quotetop'>QUOTE (tjosan @ Apr 30 2010, 05:03 PM) <a href="index.php?act=findpost&pid=1769272"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->Sources please! I cant find anything in Swedish medias.<!--QuoteEnd--></div><!--QuoteEEnd-->
Nothing yet, still waiting for confirmation. Don't bother looking for it in the media though, turning points are never televised until it's too late.
<!--quoteo(post=1769272:date=Apr 30 2010, 05:03 PM:name=tjosan)--><div class='quotetop'>QUOTE (tjosan @ Apr 30 2010, 05:03 PM) <a href="index.php?act=findpost&pid=1769272"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->And collapsed in what way<!--QuoteEnd--></div><!--QuoteEEnd-->
Mass deflation due to physical insolvency of multiple countries and currencies, possible hyperinflation in event of classic counter-action. Or at least as far as logic goes, which modern monetary system does not at all have to follow due to excess manipulation.
If there's anything to be afraid of, it's proposed solutions for the crisis rather than crisis itself.
Drop the tinfoil hat and spill your details please.
I didn't hear it from any particular source, it's my impression of what's going on in general (hence, "looks like").
Like I said, I'm still still waiting for confirmation from any source; there are a <a href="http://www.youtube.com/watch?v=rbXwe0HZFH0" target="_blank">few</a> contenders, but nothing reliable yet. Again, don't take my word for it, I just felt I had to sound off on this.
<!--quoteo(post=1769277:date=Apr 30 2010, 05:29 PM:name=puzl)--><div class='quotetop'>QUOTE (puzl @ Apr 30 2010, 05:29 PM) <a href="index.php?act=findpost&pid=1769277"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->Drop the tinfoil hat<!--QuoteEnd--></div><!--QuoteEEnd-->
That's an interesting reaction. We've just been hit by global recession not a few months ago, did everyone forget already?..
How in the nine hells can you be a programmer and not a mathematician? Mathematics are required for programming because programming is telling computers how to do maths.
For that matter how on earth can you go through modern school and not pick up some appreciation for maths? I'm not even very good at it but I still get how important and useful it is.
Depends on the field, really. Programming in general is closer to translating than anything else, except the language you're trying to speak is made of аss.
<!--quoteo(post=1769286:date=Apr 30 2010, 07:20 PM:name=Chris0132)--><div class='quotetop'>QUOTE (Chris0132 @ Apr 30 2010, 07:20 PM) <a href="index.php?act=findpost&pid=1769286"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->For that matter how on earth can you go through modern school and not pick up some appreciation for maths? I'm not even very good at it but I still get how important and useful it is.<!--QuoteEnd--></div><!--QuoteEEnd-->
Modern educational system has a knack for killing off appreciation and curiosity for absolutely any subject, consider yourself a lucky exception. Myself, I went in adoring math, I left hating it to the its last rotten bone.
On the flipside I went in good at english, left better at english, but with a profound hatred of any poetry written after 1900 and any literature written before 1800, I still like english and language in general though.
That doesn't mean I don't appreciate what it can do though, although perhaps that's more science than anything, I went in knowing some science because I read encyclopedias as a child, and left knowing an awful lot about how plants reproduce because that was on the syllabus every year, and also later on I learned how everything else reproduces and how their component parts reproduce and a vague feeling that biologists in general have a bit too much time on their hands. Oh and I also learned that I can't do chemistry because I can't see what colour the universal indicator is.
Not liking a subject surely doesn't prevent you from appreciating its power. I'm a games artist and I can't/hate to have to program but a good programmer is worth his weight in gold because without one I can't model either. Programming is arguably the superor discipline because basic art can be learned easily enough and with that a programmer can make an awful lot of games, but without programming none of my discipline is any use, and most of it is impossible because programmers make all my tools.
I doubt I would know or appreciate anything at all without Internet myself - Wikipedia loop is easily the most salient illustration of how fun learning can actually be, by the way - come to think of it, I spent an awful lot of time *correcting* what I learned in school: we still had primordial soup theory, static universe and pre-informational economy, good grief...
It's much more true today than it ever was, due to rapid inflation/taxes, high costs/spending and low interest rates: saving in general will result in a loss, and it compares unfavorably to just taking a loan anyway, and that's even assuming you can save in the first place.
If people or businesses could just save, banks would be out of business. Indeed the economy at large would halt if we didn't use the money we don't have to buy things we don't need: goods that we do actually need - food, water, shelter, (porn?) - are universally available already for most.
If people or businesses could just save, banks would be out of business. Indeed the economy at large would halt if we didn't use the money we don't have to buy things we don't need: goods that we do actually need - food, water, shelter, (porn?) - are universally available already for most.<!--QuoteEnd--></div><!--QuoteEEnd-->
Wouldn't it just be the business of making and selling things we dont need for money we dont have that would halt? We'd still have a specialised economy of making the essentials, and the tools to make those essentials and construct the infrastructure etcetc. I think that argument is pretty weak.
Technically same thing.
<!--quoteo(post=1769670:date=May 4 2010, 07:20 PM:name=tjosan)--><div class='quotetop'>QUOTE (tjosan @ May 4 2010, 07:20 PM) <a href="index.php?act=findpost&pid=1769670"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->Wouldn't it just be the business of making and selling things we dont need for money we dont have that would halt? We'd still have a specialised economy of making the essentials, and the tools to make those essentials and construct the infrastructure etcetc. I think that argument is pretty weak.<!--QuoteEnd--></div><!--QuoteEEnd-->
Everyone has to pay their bills. Today only a meager few people are involved in or required for productions that actually matter - food, water, structures, machines, knowledge, etc. - and in that scenario only they would be able to earn and thus afford anything. Rest of the world would be paradoxically left starving among over-abundance of food (as it is today, incidentally, although in another fashion).
The economic exchange mechanism had worked relatively well in the past because for the longest time most of our economy was exactly based on those "essentials", offer only rarely catching up to demand, but the modern speed of economic process coupled with huge technological leaps lead the system to substituting real demand for artificial one once the prior was satiated.
Trade cannot survive without continuous and increasing consumption, which is not a physical possibility on any level. We've crossed the line of real value already - which is why today's economy is based on generating demand rather than seeking to satisfy existing one - the moment we cross the line of real available resources is when it'll be too late to fix anything.
If we under this system only can survive as a community (or society) by producing useless things to keep the economy going then we do things the wrong way. It's a simple matter of allocation of resources and if the current system doesn't allow for it then we change the system to accomodate for our needs. Why for example should we allow 10-20% of the population to be out of work and on wellfare (because of a lack of need for them in the production) when they could be 'employed' in the educational system or to.. hell I don't know, grow vegetables ecologically in urban farming.
As someone very wise once wrote, and I paraphrase (of course), all economy is time economy.
Better, yes. More profitable, no. Profit is the name of the game.
<!--quoteo(post=1769697:date=May 4 2010, 11:25 PM:name=tjosan)--><div class='quotetop'>QUOTE (tjosan @ May 4 2010, 11:25 PM) <a href="index.php?act=findpost&pid=1769697"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->If we under this system only can survive as a community (or society) by producing useless things to keep the economy going then we do things the wrong way. It's a simple matter of allocation of resources and if the current system doesn't allow for it then we change the system to accomodate for our needs. Why for example should we allow 10-20% of the population to be out of work and on wellfare (because of a lack of need for them in the production) when they could be 'employed' in the educational system or to.. hell I don't know, grow vegetables ecologically in urban farming.<!--QuoteEnd--></div><!--QuoteEEnd-->
I couldn't agree more.
It's not exactly a hard realization either, we all ultimately think of economy as a way of distributing resources for good of everyone, or at the very least ourselves. Once you try to connect the threads from this notion to reality of the matter however, you quickly realize that just isn't what it's doing.
Well my underwear drawer doesn't magically grow more money at a rate of 0.5% the cash I have in there, and my underwear drawer also doesn't exist in hyperspace and let me take money out of it at any one of a number of hyperspace portals dotted conveniently around areas with high concentrations of shops, or by using a magical bit of plastic with arcane symbols engraved on it.
If it did though I probably would keep it in my underwear drawer.
Obvious differences aside, of course. In the context of saving as means of finance, they're practically the same.
I suggest checking it out for yourself, this is the "Whoops, we're out of food and water" kind of thing if it's really come to this.
EDIT: Definitely don't take my word for it. Don't look in the mass media either, they don't have the capacity to cover such things.<!--QuoteEnd--></div><!--QuoteEEnd-->
QFT - nice job Draco, clue me in on your tinfoil hat design as I'm lookin to upgrade
Of course this doesnt mean the euro zone will collapse, just that greece and some other countries will go second and a half world.
Some outlets are reporting Eurozone Central Bank is looking into expanding their powers under pretense of helping, that's definitely not a good thing at all.
<!--quoteo(post=1770068:date=May 7 2010, 07:45 PM:name=tjosan)--><div class='quotetop'>QUOTE (tjosan @ May 7 2010, 07:45 PM) <a href="index.php?act=findpost&pid=1770068"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->actually there have been some mutterings from the ECB that the countries south of the alps cant hold their own, which would threaten the stability of the euro.<!--QuoteEnd--></div><!--QuoteEEnd-->
Would you have some leads on that?..