Hey, I don't have much going on here yet.
I'm just interested in revisionist history atm.
I tried to remain neutral in mentioning the above debates in the Austrian literature, but...after trying to remain neutral, I feel like I should be open and admit my biases. It's also moreso to give me a small reprieve here to vent my own opinions here:
- I agree with Hulsmann that the ERE is a self-contradictory concept, and I appreciate his much simpler approach to equilibrium analysis simply being a counterfactual analysis. This is what I find the most useful in practical investment anyways.
- Once you throw out the ERE, you need to re-establish where you stand on entrepreneurship and interest.
- With respect to entrepreneurship, I am not a determinist, and therefore have issues with Kirzner's "discovery" applied to entrepreneurship. I think that Knight's view--although very simple and stateable in a single sentence--is the best definition for entrepreneurship and it has the nice side-effect of neatly making claims of entrepreneurship independent of physical determinism.
- With respect to interest, I have issue with how Austrians try to explain the real negative interest rates that occured after 2008 in the U.S. and are still going on currently in Japan and in Europe. I think Murphy's views neatly explain these phenomena, and I believe that Engelhardt has correctly pointed out that even though it agrees with Keynes, that it's independent of Keynes' other claims.
- However, that means that monetary and price inflation must also be explained correctly to fully inform an Austrian's expectations with regards to interest. And I have issues with the supposed price deflation occuring in concert with monetary inflation. To this end, I agree with Shostak's definition of money. Although I believe Salerno is technically correct, I do not believe for one iota that savings accounts act like checkings.
- This still leaves an empirical discrepancy w.r.t. monetary inflation as defined by TMS1 and price inflation--however, I believe Austrians are correct that CPI is bogus. In fact, if you treat gold prices as a general indicator of price inflation (which, like most Austrians, I believe is the case), the story that TMS1 compared to gold prices tell fits Austrian theory to a stunning T.
So in summary:
- Hulsmann for Equilibrium Theory, "Equilibriums are counterfactuals."
- Knight for Entreprenurship Theory, "An Entrepreneur bears uncertainty, nothing more, nothing less."
- Engelhardt and Murphy for Interest Theory, "Interest reflects liquidity preference."
- Shostak for Money Theory, "Putting money in a socks with the label 'savings' takes it out of the money supply."
- Murray Rothbard for President, "heheheh snort."
Block quote for page on Ludwig Lachmann (from 1985 HEBERT ON ENTREPRENEURSHIP 285):
- But, second and I think more important, Kirzner developed his theory of entrepreneurial alertness I believe in reaction to the opposite deviation from main-line Misesianism introduced into the Austrian arena by Ludwig M. Lachmann. Becoming a disciple of G. L. S. Shackle, Lachmann, and following him other younger Austrians, maintains not only that uncertainty is pervasive on the market, but also that we cannot even say that the market contains a tendency toward equilibrium, a tendency fueled by the profit-and-loss signals of the market. To Lachmann, expectations and therefore actions on the market are random, rather than responsive to market signals. It is one thing to say, with Mises and his followers, and in contrast to the euclassical economists, that equilibrium does not and can never exist on the market. It is quite another thing to say that the market does not even harbor equilibrating tendencies. The upshot is really the scrapping of economic theory altogether, and the Lachmannian economist becomes a mere institutionalist and historian, recording past choices and trends. There is no question that Mises would have called such a doctrine anti-economics. I believe that it was in horrified reaction to this Lachmannian nihilism that Professor Kirzner sought a way to downplay uncertainty and to make his entrepreneur a more tangible and objecrive entity eaming tangible profits on the market. In the dialectic of the history of thought, it is a common occurrence for one deviation from the main line of theory to give rise to a deviation in the opposite direction. Since I believe the Mises-Hayek mainline position to be the correct one on this issue, I can only hope that these deviations will in effect cancel each other out and that Austrian thought will return to its own mainstream position.