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« Maxing Out the Credit Card is Not Default | Main | What Economists Knew, and What Economists Forgot »


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I see this sort of "we've been doing X for decades and it's never worked so why do it again" as well as "X is just driven by special interests" a lot.

A version of the former was in Steve's recent response to Mario's stimulus post. A version of the latter is in your argument for why Keynesianism got so popular.

And this isn't a new type of approach for Stiglitz, either. He says this stuff all the time. Krugman I think speaks in less general terms than Stiglitz and often points to specific things he doesn't like and provides reasons why he doesn't like them, so he's not quite as bad but he runs into the same thing. It's everywhere.

I don't think there's an easy way to counter it, except to:

1. Tell the history right and get specific. Hoover was not a proto-Austrian. People have done a good job debunking this by pointing at numbers. Hoover was also not a proto-Keynesian. People have done a good job debunking this by pointing at the same numbers and clarifying exactly what they mean by "Keynesian" (hint: it doesn't just mean anyone more comfortable with government spending than an Austrian). Specificity and definition of terms go a long way.

2. Absolutely don't respond by trying to make the claim that in fact 1980-2007 was everything Stiglitz loves. Stiglitz didn't pull those dates out of thin air. There's a good reason why he doesn't like that period. If you don't also like that period it's worth the effort of highlighting why you don't like it without making the equally unfounded claim that it's somehow characteristic of anyone left of the Austrian School.

3. I personally really hate the argument that "this is what happens when you put your ideas into practice, even if it wasn't how you intended it to be implemented". Yes, there was intervention in 1980-2007. That's not an argument against "interventionism" because there's no such thing as "interventionism". There are all sorts of different kinds of interventionism. Don't make a broad case against interventionism and think the job is done. Stiglitz, me, and lots of other people are very well aware about how bad interventionism is and hardly need reminding. Again - specificity pays off in situations like this, and defending yourself rather than implicating others is usually smarter.

Many people "forget" that the principle of charitable interpretation and your other principles are as much for the interpreter as theyis for the interpreted.

Once one has started calling opponents names and publicly dismissing rival opinions as "ideology and special interests," one has made it very difficult to back out of a previous position should it actually be wrong. It's a preemptive strike against rational debate.

So Daniel, the piece that Pete and I did for FEE that documents the *specific* government regulations and Fed actions that we believe are responsible for the housing boom and bust, and that we believe show that Stiglitz's narrative is wrong, does or doesn't count here?

My continued attempt to demonstrate that the period in question was one in which the real standard of living of both the average American and the poorest Americans does or doesn't count?

(Pete and I might be wrong, I might be wrong, but I just want to know if those "count" in your view as the way to respond to arguments like Stiglitz's.)

That should be:

"My continued attempt to demonstrate that the period in question was one in which the real standard of living of both the average American and the poorest Americans HAS IMPROVED SIGNIFICANTLY does or doesn't count?"

I would ask Stiglitz to define what he thought a free, unfettered market was. And then politely explain to him why his perspetive differs significantly from what Austrians and their fellow travelers mean when they speak of free markets. And why the Austrian position actually avoids the very things he and most others find despicable in our present day market system, e.g., moral hazard, huge inequalities of wealth, cronyism, etc. etc.

This is my number one gripe with pretty much every economist. I call it the great cognitive dissonance. If you look at, I'd say, most introductory textbooks in economics they will explain the difference between a market-led economy and a state-driven economy, and then proceed to say that our current system IS A COMBINATION OF BOTH. Yet, when something goes wrong it's always the market half that's blamed, not the distorted institutions brought about by pervasive intervention, which profoundly affect the economy. They think of the government as a neutral force, overlaid over the economy, not as something that can and does change the market from what it would be otherwise.

Personally, I think it's an empirical question not likely to be answered whether a truly market actually approximates our vision, so I don't get too upset when people aren't willing to go all the way with me. I do think we have a lot of empirical and theoretical evidence to back up what we're saying though. However, what I DO get mad at are those, like Stiglitz, who are so ready to blame everything on the market without even considering how the market would be different if the institutional structure of our present system weren't directly and indirectly SUPPORTED by the government.

Steve - haven't read it yet, but of course that sounds fantastic.

Now, of course lots of people have lots of counter-arguments to specific regulations. But I think that's the point and the right way to approach it, don't you (I presume you do!)? There's no obnoxious totalizing of "interventionists" as if everyone that supports any intervention supports every intervention. And then people can get specific in response. I don't know the housing issues all that well, but for example I know Krugman - when confronted with points about the CRA and the Fed funds rate - has provided specific reasons why those had all that much to do with it. That seems like progress in the dialogue to me!

You're also more likely to find specific things that you agree on when you get specific. Despite Pete's suggestion that apparently we're not really in the "mainline" (I'm always sad to see people forcibly separate me from my Adam Smith), I would contend that there's a lot that we all agree on.

re: "My continued attempt to demonstrate that the period in question was one in which the real standard of living of both the average American and the poorest Americans [has improved significantly] does or doesn't count?"

Again, I'm not familiar with all your work but I really like your LearnLiberty video (actually I think I said at Cafe Hayek that that one by you seemed to be was atypically unpolemical for the website, which I think has a lot of lower quality work). This sort of care is really important when talking about inequality. I'm not as involved with the income inequality work at Urban, but I know they're very careful to make all these caveats and adjustments that people who may agree with them politically can fail to make - and they are very careful to point out disconcerting trends in inequality that sometimes get white-washed by the other side simply because the economy is growing. For other characteristically careful work from Urban, you can check out Harry Holzer and Bob Lerman's work disputing this idea that the labor market is becoming highly "polarized" between high and low quality jobs. There are some trends that point to such polarization, but it's not the whole story.

"Just a few years ago, a powerful ideology – the belief in free and unfettered markets – brought the world to the brink of ruin."

I cannot get pass this. What laissez-faire did we have? On what planet? If Stiglitz's point is that ANY absence of regulation he wants is laissez-faire then that is a novel definition!

There is no intellectual honesty is the description of the situation.

But, that said, we should investigate the rest of what he says. But aprioristic reasoning will not be enough.

I'm with Mario. I cannot get past the first sentence. I would stop him right there and want to discuss how he came to this conclusion. Notice he didn't say that unfettered markets caused the crash, but that the mere ideological "belief" in free and unfettered markets was responsible.

There are hours of discussion in just that one sentence, and he would have to make a strong and very extensive case to sway me to that opinion.

Based on the quotes, I have no idea what Stiglitz's ends could possibly be. For example, he complains about equality, but he does so in what seems to be a list of means. Means to what ends?

And clearly Stiglitz is using a definition of laissez faire that almost nobody else on earth would use. You also have to agree on definitions for a dialogue to be able to continue.

I have noticed that regulators love to "deregulate" in such a way that it will cause problems they can blame on the market and the deregulations (which are often a mere change in regulations). This becomes obvious if you pay close attention to the regulations in place and the way they interact with each other and the way that removing one piece from the machine is going to affect the way it works.

My question is, why doesn't Stiglitz know or understand this? Is it bad theory? Bad data? Willful ignorance? Ideological blinders?

I think in a case like this you have to assume that the person you are trying to have the discussion with has to have every little term accurately defined, details laid out as clearly and simply as possible, connections made explicit, etc. This level of intellectual dishonesty in describing the situation needs to be met with an assumption that they have almost complete ignorance of the basics of what they are talking about. That's the only way you can treat Stiglitz as you want to, Pete.

Two separate ideas:

1. The premise of the first sentence must be resolved before discussing Stiglitz's postulations. That must consume one's entire focus. IMHO, a suitable beginning would be that all banking regulation in the last 50 years has increased gearing.

Another approach might be to return to a definition of 'free markets' and discuss whether large pieces of regulation have guarded markets or distorted them. One example is the pervasiveness of information; free markets depend on simple, clear rules and information in order to maximize efficiency. Regulation, including from the FASB, has allowed obfuscation of information, not guarded its dissemination. Example: not even the SEC or Lehman's auditors could tell Lehman was bankrupt. This is the principle argument against unquantifiable derivatives off the Balance Sheets of public companies, not the more popular one that they are risky. And too often free marketers arguments for laissez-faire can not be practically distinguished from freedom to commit fraud or cook the books.

2. The three core rules of engagement are honorable. But any game theory will tell you that those rules force you into a losing position if the other side ignores them. Exhibit A are Stiglitz and Krugman. The more appropriate response is to demonstrate an equally disruptive argument from another viewpoint, and offer the olive branch of a reasonable argument. And given the pervasiveness of the Progressive position, if winning the argument is the goal of free marketers, then the response strategy must grow exponentially in both breadth and tactical sophistication. Currently most of it is merely reactionary.

But make no mistake; it is overwhelmingly large government proponents that are crowding out reasonable discussion and making straw man and ad hominem arguments. To pretend legislation since the financial collapse does anything to reform or reset the system borders on immoral. Sometimes we need to call a spade a spade.

re: "Exhibit A are Stiglitz and Krugman"

And exhibit B is all non-Stiglitz, non-Krugman human beings.

Let's shoot for some collective action here. We can communicate with each other, after all, and you know what Elinor (and... well... everybody) says about game theory when we can communicate with each other.

re: "Currently most of it is merely reactionary."

You seem to have no concept of the extent to which this is EXACTLY how it feels to the other side too. Crossing your arms and harumphing about it doesn't do much.

After re-reading Hayek's Counter Revolution of Science recently I was thinking about the same issue. Therein Hayek discusses that one of the consequences of misapplied methods - positivism and scientism - in the social sciences is the misdiagnosis of social problems and the confusion of language.

One thing that I think might help correct for this is a structural model of the policy world. Austrians recognize diversity in subjective preferences and the capital structure; arguably there is also a structural heterogeneity in the realm of public policies. While ideas and ideologies might be popular at certain time periods that does not necessarily mean that they dominate in all applied realms of public policy.

Friedman carried lots of influence in liberalizing international trade markets but little of his advice concerning constitutional constraints on monetary expansion were taken to heart. A popularity of free market ideas does not necessarily mean a uniform adoption of free market policies nor visa versa.

I think Max Weber comes closest to this sort of framework. I often think of his work as an attempt to construct a taxonomy of society's most important institutions and influences - economics, politics, culture, etc.

A good way to refute an argument one believes to be fallacious is to turn the argument back on itself. For example, what is a "free" market, when has there EVER been one since the Age of Agriculture, and what does it really say about the argument that it objects to freedom?

Another method is to first agree with the interlocutor's stated criticism as timely, but then eviscerate the argument for its fallacies by detailed and specific counter-examples. Not with rhetorical flourishes, but with actual examples.

Best of all, point out that the argument is merely one perspective, perhaps itself just as ideologically motivated as the objection in the argument. Offer the alternative perspective, and deliberately encourage the reader/listener to choose which perspective is more accurate. Overwhelmingly, an audience responds to the perspective which deliberately 'trusts' the audience to decide which argument is best.

If in fact there has never been a 'free' market, why do we continue to call for one? Isn't this exactly the argument that socialists make: there has never been a 'true' socialism, so why don't we adopt one now?

Would the term, 'open market' better explain what we mean, if in fact we mean: "A market-based system of economics where government intervention is minimized to the extent that it protects the free flow of information, punishes criminal abuse, and plays no favorites in policies or regulations."

Then we freedomists would have a motto: "Open minds, open markets, open inquiry," and I would like to learn of Dr. Stiglitz's objections to that.

Daniel said...
"specificity pays off in situations like this, and defending yourself rather than implicating others is usually smarter."

Joe Stiglitz said...
"On the contrary, a resurgence of right-wing economics, driven, as always, by ideology and special interests, once again threatens the global economy – or at least the economies of Europe and America, where these ideas continue to flourish. ..."

Implication - Joe Stiglitz is not quite as smart as I had imagined.

I've just read Stiglitz's article that you link to.

The problem is, this is not a scholarly, or semi-scholarly analysis that attempts to "dispassionately" discuss the current economic policy climate, and what lessons may be learned from an interpretation of the "causes" of the economic boom and recession, followed by a "value-free" discussion of the successes and failures of the various "recovery" policies that have been implemented.

This is a value-laden polemic of the type that, say, Max Weber or Ludwig von Mises would have criticized if made by a member of the German Historical School such as Gustav von Schmoller.

Stigliz presents supposed "facts" about policies implemented and the "real" motives of various policy advocates, and then proceeds to offer an "enlightened" and "factual" critique of how financial and related free markets caused the crisis; plus, an asserted "factual" claim about stagnant or falling standards of living for all by the "rich" over the last decades. All couched in moral indignation from a conception of "social justice" that all should take for granted -- except those with "right-wing" ideologies and "rich people" special interest groups.

This is no way to presume that Stiglitz is operating from any "scientific" perspective, with a few implicit "value" conceptions.

He has an agenda. And he is the "ideologue" in this piece. He is propagandizing to those in the "gallery."

How should one respond? By (a) challenging his causal analysis of the factors behind the boom and recession; (b) counter his assertions about the "facts" of decades-long growing economic inequality; (c) explain that his "target" -- "the free market" -- is based upon a misunderstanding about what a free market is versus what an interventionist system is; and (d) how what he considers to be a "failure" of unregulated "capitalism" is in fact another instance of the contradictions and harmful consequences of the Interventionist State.

The problem is, Pete, is that to do so "dispassionately," and only focusing on policy "means" analysis and not judging desired policy "ends," all while trying to place Stiglitz's argument in the "fairest" light, will require a much longer piece that Stiglitz's own short essay.

Which means you must focus on an audience different than the "op-ed" audience that the style and content of Stiglitz's piece is clearly directed toward.

This means that the responder must use some of the same "op-ed" polemical style that Stiglitz uses. Hence, the "art" of the free market commentator -- may a thousand Bastiat's bloom!

Richard Ebeling

This kind of essay belongs to the mythopoiesis of the impendig end of capitalism system which is sweeping away our human society (unless you do what I say) that becames so fashionable in period of financial crisis.
There is nothing to reply in scientific terms to what Stiglitz wrote. His assertions are mainly pure rethoric and we pay attention to him because he's a leading mainline and influential economist. Surely he will be translated in the span of few days: I bet that within monday I will read that article at least in one of the main national newspaper, here in Florence, translated into Italian with an emphatic heading.
And some people will blame - as usual - financial markets beacause of the increasing spread between Bund and BTP, disregarding the huge amount of public debt and its astonishing ratio with GDP.

Anyhow it is significant and I think that broadly speaking the relevant question is why do Austrians have a bad timing in the market of ideas? Why is it so difficult to be not painted like liquidationists during bad times or like Cassandras during good times? Is it possible for Austrians to make politically workable proposals even if they're second best solutions?

For a good sart especailly tied to the how the period from 1980 to 2005 illustrates how well markets can perform when freed even marginally from some of the collectivists' constraints of the past see Andrei Shleifer "The Age of Milton Friedman." Journal of Economic Literature. 47:1, 2009, pp. 123–135. Per Shleifer "Between 1980 and 2005, as the world embraced free market policies, living standards rose sharply, while life expectancy, educational attainment, and democracy improved and absolute poverty declined" (p. 123). He then asks, "Is this a coincidence?" After reviewing competing claims he concludes, "On strategy, economics got the right answer: free market policies, supported but not encumbered by the government, deliver growth and prosperity" (p. 135). This period might have better ben described as the Age of Hayek.

"If the programs have failed, then why should we continue throwing good money after bad, especially at a time when we are financially strained?"

I'm pretty sure Stiglitz is referring to the financial regulatory environment when he refers to a "powerful ideology – the belief in free and unfettered markets."

Stiglitz believes that certain financial deregulation's created an incentive structure which rewarded overly risky behavior on the part of banks, and that the banking system lacks mechanisms which prevent such risky behavior. This is why, in his eyes, the government must create certain barriers to prevent systemic catastrophe's.

Now I don't agree with his position, but we should directly address what he's actually referring to. I doubt that Stiglitz is talking about the war on drugs, and he probably would support cutting military expenditure.

2) adopt a value neutral analytical approach --- strictly take ends as given and limit your analysis to the effectiveness of chosen means to those given ends;

Pete - I realize you are an economist not a philospher, but surely ends are really what matter in the end. It's also difficult to discussing them in any evaluation of the policies of the last generation - for example, Stiglitz's whole critique of free markets is clearly driven by an ethical animus against income inequality. Or do you really think that you both share the same ends and are merely having a quarrel about the means? If so, I'd like to know what you think those shared ends are.

Sorry - make that "it's also difficult to avoid discussing . . ."

What is the result of applying the principle of charitable interpretation to Stiglitz and Orszag’s increasingly hard to find gem of a 2002 paper: "Implications of the New Fannie Mae and Freddie Mac Risk-Based Capital Standard".

Stiglitz and Orszag concluded that
"on the basis of historical experience, the risk to the government from a potential default on GSE debt is effectively zero."

Plainly, Stiglitz got it wrong. Should we be 'judges, and hanging-judges at that'?

I have spent 27 years in the world of professional advocacy in the area of economic regulation and policy, as both a regulator and a consultant. I stumbled upon the Austrians shortly before the financial crisis driven by dissatisfaction with the mainstream economics I had been taught. My story is one I am sure you have all heard before: at school no one even mentioned that the Austrians/free banking/etc. even existed, not even to dismiss them out of hand, etc. , blah, blah.

Even as a hardened professional advocate, a mercenary, I have been shocked by the naked bias of the op-eds/blogs of many mainstream academic economists. Given my background, I am well aware that people can have different views and that often good arguments exist on both sides. But it was the obviousness and the sloppiness of the bias that surprised me - the inconsistencies and willful blindness either of the facts or the real case to be answered. Professional advocates are careful not to make themselves vulnerable that way because they know that their counterparts on the opposing side will immediately sense weakness and tear them apart. It imposes a kind of discipline that tends to moderate the debate a bit and limit attempts to really egregiously distort the facts. It is pretty clear to me that that sort of discipline is absent from the public debate on economic policy and in particular the role of markets vs. intervention, otherwise we wouldn’t see such shoddy polemics.

Am I the only one who thinks that there is absolutely nothing that an Austrian or any their fellow travellers could write on these matters that prominent progressive standard-bearers would admit in public to agreeing with? That’s probably because they want a world that your analysis couldn’t possibly lead to. I don’t see your academic and ideological opponents declaring defeat, having a “I could've had V-8!" moment. They’ve been repeating the arguments (in some cases for the last 80 years), tweaked as appropriate, despite a mountain of opposing work and frequently a contrary academic consensus. Why should they stop now after one more piece is added to the pile? As an advocate, I would suggest that Joe Stiglitz is not your target audience.

The progressives and statists have succeeded for lots of reasons. Two of the most important are: a) the left has taken the moral high ground and free market advocates have either ceded it or been too apologetic to convincingly take it back, and b) stealth. It’s the latter that’s particularly important to your questions above.

When someone ignores prominent facts or is inconsistent, it’s reasonable to infer either incompetence (not likely in Nobel Prize winners) or bad faith. By bad faith, I mean the pursuit of objectives other than the stated ones. In those cases, why does your duty to the public and the truth not require you to, at the very least, note the presence of other motives and of bad faith even if one chooses (quite reasonably) not to speculate as to what those motives might be? Would it have been violated some code of gentlemanly conduct to impugn the motives of Ellsworth Toohey?

An additional thought:

One of the most interesting interviews I have seen over the last couple of years involved a mini-debate between Stiglitz and Hugh Hendry on a UK TV show. Hugh Hendry is a flamboyant hedge fund manager with vague Austrianish tendencies and a bit of a bulldog. The discussion was about Greece and the other piglets. Stiglitz was IIRC acting as an advisor to Greece (!) and spouting a variety of spin. Hendry basically said, "That's utter nonsense" and launched into Stiglitz. Even though Hendry was probably only 50% right, Stiglitz was the proverbial deer in the headlights and was left sputtering and looking generally unimpressive. He wasn't used to being challenged or having to face someone who had not bought into the polite orthodoxies.

"When we discover that certain ideas about man, history and society seem, to those who believe in them, to be either self-evident or so manifestly correct that opposing them is a mark of stupidity or malice, then we may be fairly sure we are dealing with an ideology and ideological thinking." - James Burnham

I went to a lecture of Stiglitz's while he was in Australia and not much has changed from the looks of it. In between attacks on his (false) interpretation of laissez faire he recommended things like global income redistribution to reduce savings and boost consumption; more regulation; a tax on countries that save too much (Germany); and during the comments when asked about what his solution would be - or rather how it would be possible to enact his recommendations as he was clearly frustrated that governments around the world were not being 'proactive' enough or were constrained by silly things like legal checks and balances or constitutions - he implied that the ideal would be for a global government with a global fiat currency, but only so long as the "right people" (Stiglitz) were in charge.

In the above article his call for things like "greater equality" are nothing more than an attempt to reinforce his position on the moral high ground thereby allowing him to make moral arguments while maintaining his apparent 'objectivity' as an expert.

I noticed that he never defines what "greater equality" is, but presumably he means income equality. He mentions that the rich are getting richer and the poor poorer, ignoring that these people move between brackets and are almost never the same people. Also, his selective use of data (not provided) is countered by a quick Google search: from 1970 to 2007, US real income per capita almost doubled (and that ignores shorter work years and increased leisure which reduce this figure). Are people really worse off, especially given that the 'poor' are usually young, unskilled people just starting their careers who don't stay poor forever?

IMO his views and methods are no different to those of any people who have tried to forcibly impose their value sets on entire populations; he postulates himself as an objective expert with the moral high ground and whose conclusions are backed by logical analysis and scientific evidence and he only wants what is in the "public good"; he definitely isn't pushing his own self-interested ideology while dismissing or discrediting opponents without engaging in any kind of cognitive dialogue with them.


Stiglitz’s claims that
“On the contrary, a resurgence of right-wing economics, driven, as always, by ideology and special interests, once again threatens the global economy – or at least the economies of Europe and America, where these ideas continue to flourish”

What is his evidence?

Not for two decades at least has a fiscal expansion been presented as useful tool for macroeconomic stabilisation.

As Tom Sargent observed, it is if the last 60 years of macroeconomics has been forgotten.

John Taylor has developed the excellent term the great deviation to describe the recent era after the great moderation:

• The great deviation is the recent period during which macroeconomic policy became more interventionist, less rules-based, and less predictable.

• It is a period during which policy deviated from the practice of at least the previous two decades, and from the recommendations of most macroeconomic theory and models.

• Great Deviation killed the Great Moderation, gave birth to the Great Recession, and left a troublesome legacy for the future.

As for Stiglitz’s claims that over the course of this ideology’s 30-year ascendance, most Americans saw their incomes decline or stagnate year after year.

I respond with Brad Delong’s time machine: how much would you ask in additional income to step into his thought experiment and go back in time, in this case, to 1981 with its shorter life expectancies, the cold war warming up again, and much smaller and lower in quality basket of goods to choose from?

If Stiglitz’ claim that most Americans saw their incomes decline or stagnate year after year is true, many will actually pay to go back in time to the good old days of 30 years past because their real incomes will increase! Keep asking yourself these questions as sobriety tests?

I see no economic analysis in Stieglitz piece, only ideology.

Stiglitz, like Krugman, offers sophism at its best. Rational argument will not win against suckers for sophism. Nevertheless I don’t want to be a sophist.

I get this nonsense from socialists a lot. I point out the number of pages of the Federal Register, which has averaged about 50k pages since 1970 and the vast increase in spending on regulation.

When I ask them what regulations were abandoned, they can usually come up with nothing more than Glass-Steagall. I point out that G-S was dropped for the Basel I & II accords, which are European and therefore by the left’s perspective superior banking regulations.

So then I ask them to point out an area of the economy that had no regulation whatsoever.

Then I talk about the reason for the mild deregulation that began under Carter – the stagflation of the 1970’s. Most people today don’t know that the federal government used to set prices for phone calls, shipping, airline travel, bank interest rates and more.

It blows my mind how Stiglitz just summed up what Tom Woods has claimed to be the mainstream analysis of the financial crisis, word for word, in just two short paragraphs. It should be uncharacteristic of an economist to regurgitate boiler plate polemics that are often spouted by plebs at democratic underground, yet here we are.

PS, socialists I discuss this with usually ignore what I write and just repeat themselves. But I expect that a few people who aren't posting and just reading may be undecided and willing to listen.

Reading the whole thing, all I have to say is that there are lies, damn lies, and then there's Stiglitz.

There is no convincing someone like him. He cannot be convinced. One responds to such things only to try to convince those on the fence. He has to be countered to counteract his outright lies. Sometimes giving the most generous interpretation is to side with those promulgating lies (to put it as politely as possible).

What did Mises do?

In the Preface to the 2nd Edition of _Socialism_ he very directly went after the techniques of bullshit deployed so successfully by Marx.

Let me say that again -- he went after the techniques of bullshit deployed by Marx. He didn't much bother with the specifics of Marx's economics.

He went after the techniques of bullshit giving rhetorical power to the whole intellectual project:

"It was at this moment that Marx appeared. Adept as he was in Hegelian dialectic - a system easy of abuse by those who seek to dominate thought by arbitrary flights of fancy and metaphysical verbosity - he was not slow in finding a way out of the dilemma in which socialists found themselves. Since Science and Logic had argued against Socialism, it was imperative to devise a system which could be relied on to defend it against such unpalatable criticism. This was the task which Marxism undertook to perform. It had three lines of procedure. First, it denied that Logic is universally valid for all mankind and for all ages. Thought, it stated, was determined by the class of the thinkers; was in fact an "ideological superstructure" of their class interests. The type of reasoning which had refuted the socialist idea was "revealed" as "bourgeois" reasoning, an apology for Capitalism. Secondly, it laid it down that the dialectical development led of necessity to Socialism; that the aim and end of all history was the socialization of the means of production by the expropriation of the expropriators - the negation of negation. Finally, it was ruled that no one should be allowed to put forward, as the Utopians had done, any definite proposals for the construction of the Socialist Promised Land. Since the coming of Socialism was inevitable, Science would best renounce all attempt to determine its nature.

At no point in history has a doctrine found such immediate and complete acceptance as that contained in these three principles of Marxism. The magnitude and persistence of its success is commonly underestimated."

Here's Hacker going directly at Soames' BS account of the history of analytic philosophy.

Let me say that again. Hacker directly and very honestly targets the techniques of bullshit deployed by Soames to advance a bogus history of the field Hacker and Soames share.

Here's Hacker:

"Soames does not paint a plausible picture of the development of analytic philosophy. In its
selection of materials it is unrepresentative; significant figures are omitted and pivotal works
are not discussed. The complex relationships between different overlapping strands in the
analytic movement are not elucidated. In fact, the book is less a history of analytic
philosophy than a series of critical essays on select figures and a few of their works, often
chosen primarily to substantiate a thesis that is erroneous. Soames’s evaluations are distorted
by his principles of selection, and by his incomprehension of many of the works he discusses
and of the issues involved. I shall substantiate this in what follows."

Hacker doesn't hedge, he doesn't attempt to come of with phony "good motives" for Soames. He very honestly calls it like he sees it, and he doesn't beat around the bush.

Greg, good post about Mises

Schumpeter also made relevant observations in the early chapters of his history of economic analysis and in his AEA article science and ideology. Both focused on Marx’s use of personal attacks as a way of avoiding debate.

Both papers also emphasised that one of the purposes of the scientific method and of science is to have objective debates that escape personal biases. The very notion of science is premised on an impartial search for knowledge.

Popper’s definition of science as a set of testable propositions also attempts to rise above personal biases and speculation to an impartial standard.

John Quiggin made similar claims in the Australian Economic Papers in 1987 about how public choice is ideologically biased.

Brennan and Pincus in their reply asked what his evidence was. They suggested that attacks on the professional integrity of scholars should be backed-up by evidence, if the criticisms are to be taken seriously.

The emergence of the Internet allowed research into the voter registrations of social scientists. Dan Klein found that

• Academic social scientists overwhelmingly vote Democratic, and the Democratic hegemony has increased significantly since 1970.

• Of the fields sampled, anthropology and sociology are the most lopsided, with Democratic to Republican ratios upwards of 20:1, and economics is the least lopsided, about 3:1.

• Among social-science and humanities professors up through age 70, the overall Democrat: Republican ratio is probably about 8:1.

• These findings are generally in line with comparable previous studies.

When encountering an outburst about how positive economics is the spawn of neoliberalism and the handmaiden of the new right, asking ‘how do you know that’ and ‘what is your evidence’ slows people down.

Personal attacks such as these routinely assume the facts about motives and political affiliations than check them. There are bound to be studies because the issue of personal bias is central to the scientific method.

p.s. an old bureaucratic tactic for distracting an opponent is to ask a junior colleague at the meeting to attack the integrity and intellect of an opponent.

This opponent uses up their airtime at the meeting and elsewhere defending themselves rather than advancing their policy position and countering yours.

I agree with Jim Rose, but I think there is a much simpler empirical challenge. Stiglitz's statement that "over the course of this ideology’s 30-year ascendance, most Americans saw their incomes decline or stagnate year after year" is almost certainly false in any way we consider it.

Take the real incomes of everyone alive in 1981, and almost certainly more than 50% have seen increases (I would guess over 90%). This fact should hold however we interpret Stiglitz's statement: confine it to adults, to households (size-adjusted), native-born males, or anything else. I would venture that it is even true for a strong majority adjusting for life-cycle effects.

If that claim is empirically false, the rest of his argument can be simply dismissed.

thanks Jeremy H.,

A way to really show your age these days is to have a good adult memory of regular recessions and high inflation.

In the case of the USA, that takes you back to before the great moderation from late 1983.

Stagflation, double digit inflation and low productivity growth are Stiglitz’s good old days.

Much of the moral panic over the great recession is the product of those young pups in the media that did not grow up in the 1970s. They grew up in the 1980s.

I even just remember when international travel just came with the reach of frugal ordinary people in the early 1970s.

One of my sisters saved up about a year’s income to buy a A$2,000 ticket to go from Australia to the UK via the USA in 1973. Jumbo jets had just been introduced.

I even just remember black and white TV. Colour TV was illegal in Australia prior to 1973. Cable TV was illegal in Australia until the mid-1990s.

Daniel Kuehn,

Yes, there was intervention in 1980-2007. That's not an argument against "interventionism" because there's no such thing as "interventionism". There are all sorts of different kinds of interventionism. Don't make a broad case against interventionism and think the job is done. Stiglitz, me, and lots of other people are very well aware about how bad interventionism is and hardly need reminding. Again - specificity pays off in situations like this, and defending yourself rather than implicating others is usually smarter.

It seems to me that it is Stiglitz himself who is guilty of this kind of simplification; anything else or less than his vision is "American-style deregulated capitalism." It's the only coherent interpretation, otherwise you have to resort to saying he's dishonest.

It is true however that suggesting that things are much more complex than a simple free-market/intervention spectrum could be an opportunity to dismiss the "deregulated capitalism" claim without giving the image of being too ideological.

All one has to do to counter Siglitz's falsehood that "over the course of this ideology’s 30-year ascendance, most Americans saw their incomes decline or stagnate year after year" is to show people the data. Real median incomes fell from 1973 until about 1990. They rose sharply from 1990 until about 2000 when they flattened. The data is easily available.

Back from seeing Joe Stiglitz in person in China, :-).

First, I agree with Pete's three ways we should approach thinking about peoples' ideas. Second, I think that the portions of Stiglitz's piece he quotes are largely ideological ranting with little in the way of specifics to support it. That said, some other points need noting, some already made by others.

One is that Stiglitz would probably agree with much of Pete's suggested cuts. He was the one who estimated the cost of the Iraq war at $3 trillion or some such number and clearly disapproved of it. Think he would have little problem with cutting "war on terror" funding. While he has not written on it to my knowledge, doubt he would oppose at least some cutting of funding for "war on drugs" either, although I am not sure the scale of that. But he would probably disagree on "poverty alleviation," and it is unclear what all that includes. Are talking Head Start? Food stamps? Medicaid? Vouchers for schools? What? There is little doubt that cutting some of those would raise the poverty rate, at least in the short run.

Then there is the matter that Pete leaves out the part of Stiglitz's piece that is clearly behind his frustration and some of his remarks, the current nearly incoherent debate over raising the probably unconstitutional debt ceiling. I think he is completely correct in labeling those who want to cut taxes on the wealthy as part of an effort at deficit reduction as being driven by "special interests." We are supposed to take this sort of stuff seriously? It certainly is not fiscally responsible, and Pete invoking studies of "fiscal responsibility" in response to Stiglitz on this seems out of place.

As for why the housing bubble happened, sorry, guys, but focusing on the CRA or even Fannie or Freddie as main causes just damages your credibility. The bubble was led by high end housing not the low end stuff. Sure a lot of the mortgages that went bad were low end stuff, but F&F only got into that game late due to their being semi-privatized and having to keep up with Countrywide and all the private lenders churning out the subprimes. And then there is the minor detail of a whole bunch of other countries having even worse bubbles than ours with no CRA or F&F.


I agree that some of the stuff you have pushed on people being better off than we think is correct. But indeed few economists are following you on this, much less most official data, so it is a bit off to poke at JS that he is not doing so either. Indeed, over on Marginal Revolution, Tyler Cowen was just trumpeting Justin Wolfers (whom I know you and Pete thinks is cool on this stuff) providing yet another explanation for the Easterlin Paradox (at least in the US): happiness has not risen in the US because real median incomes have not risen (although happiness failed to rise also during the period after 1956, the year of max US happiness, when median incomes were still observed to rise for a couple more decades according to even the official stats).

Stig says we "need for greater equality, stronger regulation, and a better balance between the market and government."

The question is to what end do we "need for greater equality, stronger regulation, and a better balance between the market and government"? Ambiguity abounds.

Ambiguity begins with the idea of "we" implicit in Stig's statement. What "we" "need"? This is a Pandora's Box. Reminds me of Rand's Anthem.

Then there is Stig's desire for "stronger regulation". What does this mean? Does it mean that governmental regulators should have more power to exercise discretion? Applying Pete's proposed procedure of putting lipstick on a pig: Maybe what Stig is saying is that he wants far fewer and less onerous regs so that they will be stronger by virtue of being more widely accepted. (And maybe pigs fly?)

Next comes "better balance between the market and government". OK, begin with "the market"; does any Austrian think it useful to think of "the" market? But put this aside and think happy thoughts: Maybe Stig's "better balance" means less and not more regulation by jackbooted thugs. (Again, this is akin to saying pigs fly).

I'm not sure at all that snark is not the appropriate response to snark. TIT-FOR-TAT has lots to recommend it according to the results of Axelrod's tournament. What evidence is there that trying to make a silk purse out of a sow's ear is an evolutionarily successful strategy?

Barkley, this leftist talking point has a thousand holes in it, and has been shot down repeatedly.

"the probably unconstitutional debt ceiling"

From the U.S. Treasury Dept. yesterday:

" Contrary to Professor Laurence Tribe’s assertion (Op-Ed, July 8), Secretary Geithner has never argued that the 14th Amendment to the U.S. Constitution allows the President to disregard the statutory debt limit. As Professor Tribe notes, the Constitution explicitly places the borrowing authority with Congress, not the President.

The Secretary has cited the 14th Amendment’s command that “[t]he validity of the public debt of the United States… shall not be questioned” in support of his strong conviction that Congress has an obligation to ensure we are able to honor the obligations of the United States. Like every previous Secretary of the Treasury who has confronted the question, Secretary Geithner has always viewed the debt limit as a binding legal constraint that can only be raised by Congress."

"I think that the portions of Stiglitz's piece he quotes are largely ideological ranting with little in the way of specifics to support it."

In other words, it's bullshit.

Friedrich Hayek & Deidre McCloskey in their work go to great efforts to identify fake signifiers of "knowledge" or "science" that are used as technologies for "pulling one over" on others -- this is what Hayek's whole effort on "scientism", "given data" and mathematical equilibrium constructions is about; and McCloskey is up to the same thing in her discussion of "significance testing" and much else.

Unfortunately, McCloskey's bogus account of science as mere "rhetoric" or "talk" is an ink cloud, a smoke fog, replacement BS that does adds more error and confusion than it eliminates.

After refuting every nut & bolt from Keynes in the early 1930s -- to no end -- Hayek identified that effort as hopelessly never ending, and turned to exposing the BS implicit in the whole mistaken "scientistic" strategy assumed by Keynes' aggregated macro relations and much of the rest of the fake "science" rhetorical technology being developed by the economic profession.

The task became BS detection and unmasking -- complemented by juxtaposition with a sound causal / explanatory rival with genuine scientific bona fides both equal to and equivalent with Darwinian biology.

Could someone remind me as to what Stiglitz’s would have done differently since 1981?

His op-ed is free of details on what he would change back.
• Looser monetary policy?
• More financial regulation that can then be captured and become another too big to fail excuse?
• What product markets would he re-regulate?
• Which tariffs would he put back up?

Indiana Jim and Jim R.,

Clearly Stig is guilty in this piece of total vagueness regarding specifics of what he would support on his points. Jim R., of those you list, at least one he is on record as opposing, which is putting back any tariffs.


"A thousand holes"? Really? So, the Counsel of the Treasury disagrees with Laurence Tribe, although without specifically addressing the constitutionality issue, and Tribe is by far the superior constitutional scholar. Yes, it is currently "legal," but it may not be constitutional. Indeed, when asked specifically about this on Wednesday, the actual constitutional scholar of the administration, President Obama, refused to comment on the matter of the constitutionality of the debt ceiling. If push comes to shove, he may yet weigh in on the side of Tribe.

Whether it is constitutional or not, which is clearly a matter of debate (and the only Supreme Court ruling on the matter back in 1935 did not strongly support its constitutionality according to some observers), it is incoherent, and the US is the only nation in world history to have ever adopted such a nominal debt ceiling, which we did in 1917, although we have not had to face its incoherence since we have simply raised it regularly whenever it threatened to kick in. Its incoherence is that it puts the Secretary of the Treasury in an unavoidably illegal situation if Congress fails to act one way or another, as indeed it is their duty to determine spending and taxes. The Secretary is required to pay the bills arising from what they have passed to be spent, and if s/he cannot do so due to the debt ceiling limit, then s/he will unavoidably end up breaking the law one way or another.

BTW, Greg, it is about time somebody more directly called you on your repeated use of the "bs" word. It is intellectually vacuous and clearly in violation of the spirit of the remarks in Pete's initial post about how to conduct informed discourse. An occasional outburst of it can be dramatic and amusing, but constant repeated use of it simply degrades your arguments, Greg. You can do better than this.

Barkley and Greg,

I was making a serious remark above about evolutionary strategies: What evidence is there crapping on crap (TIT-FOR-TAT) is not a winning strategy?

Jim, you make a good point. Responding to snark with reason is a recipe for failure in public debates. The left's main tools are the straw man and ridicule and they are very effective on the general public.

However, according to PR research a combination of ridicule and reason works far better. People choose to believe what they believe for emotion reasons, then go searching for rationale so they don't look stupid when they discuss their decision.

So reply to snark with snark, ridicule with ridicule, but offer evidence and reason to back it up.

You've got to be kiding. This would create an historic constitutional crisis.

And note well. Obama is not a constitutional scholar. He has no scholarly publications.

"it may not be constitutional. Indeed, when asked specifically about this on Wednesday, the actual constitutional scholar of the administration, President Obama, refused to comment on the matter of the constitutionality of the debt ceiling."

And Tribe? A noted scholar also noted for twisting like a pretzel to advance whatever policy outcome he wants to spin at the moment -- i.e. his jurisprudence and constitutional stance comes down to special pleading for political hackery by the judiciary and the law professors.

Jim, what we don't want to do is to be bullshitters ourselves, there is already too much bullshit.

What you want to do is to expose bullshit and to identfy and put a big sign "BULLSHITTER" around the bullshiters. This is what Mises did with Marx, and what Hayek finally did with Lerner.

A bullshitter can't be trusted. Bullshittery is to be avoided. George Washington didn't found a new nation by being a bullshitter. Quite the opposite.

Barkley, Read philosopher Harry Frankfurt's well known and respected book / essay "On Bullshit" and the we'll talk.

The article has spawned professional literature in the peer reviewed philosophy journals. It's an important issue and a significant category of epistemoply that we all use everynday.

Frankfurt's essay is easily googled.

Barkley, "bullshit" is now well established and firmly demarcated technical term in philosophy. Time to update your (aging) hard drive.

barkley, "It is intellectually vacuous"

Frankfurt's essay and the peer reviewed literature it has spawned provided overwhelming proof of the vacuity of your assertion.


I am not a bullshitter, nor is my post bullshit; so obviously I agree with you.

It seems clear that Harry Frankfurt is inspired in his project in part by the modern children of the Marxist legacy -- i.e. Frankfurt is working on the same project as Mises, attempting to confront leftist technologies of bullshit, initiated by Marx, and developed in very sophisticated forms in the 20th century by the Frankfurt school, by Derrida, and the various Post Modernists.

In other words, there is a special problem for classic liberalism and what Boettke calls the "Mainline" in economic science arising from the various technologies of bullshit deployed by its rivals from the historicist / positivist alliance, which has produced various forms of fake science, i.e. scientistic research programs -- all complicated by the special legacy of the Marxist inspired genetic fallacy always deployed against classical liberals and the main line in economic science, which has morphed into an ongoing campaign of bullshit, a good deal of it traceable to the Soviet years (e.g. the "PC" intellectual enforcement movement, the deployment of the label "fascist" against classic liberal rivals to the PC cohort of the moment, etc.).

This is real phenomena -- and it is extremely dishonest to deny its existence, which is a typical technique of the opponents of classical liberalism and the mainline in economic science.

The old leftist / Frankfurt School / Marxist trope never go out of fashion.


Hayek REPEATEDLY denies that the market is natural or is natural to the human species -- it's an ongoing Hayek theme, found throughout his works.

But a book was just published attacking Hayek for "his" theory that the market is "natural".

If this isn't bullshit, what is it?

And how can we even deal with the motivation for this attack or its principles of inquiry if we don't zero in on what it is -- active bullshit generation with zero regard for truth or falsity, i.e. with zero regard for what is actually in a man's life work.

Simply pointing out the specific intellectual errors is a thankless and never ending task, and these efforts are studiously ignored.

What has to be taken on is the over-arching activity of bullshit generation itself.

If you start throwing mud back and forth with Naomi Klein (work endorsed by Joe Stiglitz), you are just going to give legitimacy to the fake debate -- as if the issues involved are actually legitimate, which they are not.

Ditto with Stiglitz. Engage him on the question -- "We live in a period of radical laissez-faire, and just how much has that fact produced our current problems?" and give legitimacy to his premises, and you are trying to dig yourself out of a hole. HIS question is given the benefit of the doubt, and you are merely giving publicity to his bogus claims. You are legitimizing his bullshit and raising doubts about the legitimacy of your own claims.

Jim, I'm guessing in the big picture we are agreeing.

I'm talking about the most effective ways to crap on bullshit. You don't crap on it with more bullshit.

You destroy it with truth -- truth that exposes what is going on and what person is trading in.

"What evidence is there crapping on crap (TIT-FOR-TAT) is not a winning strategy?"

E.g. Mises exposed what Marx was trading in.

Hayek exposed what Lerner was trading in.

(Note: Hayek failed in 1936 when he didn't name Lerner explicitly, he won when he finally named Lerner explicitly, and explicitly identified Lerner's "given data" trope for what it was.)

Hayek's strategic failure in the 1930s and 1940s was being too polite -- know what knew what he was talking about or who he was engaging, because Hayek refused to say, e.g. in his 1936 paper or in his "scientism" essays.

In later years, Hayek turned over his cards, and explained he was talking about Lerner and Keynes, among others.

His arguments then -- finally -- began to hit home. People began to figure out what the context was.

Hayek was too polite -- or too wary of controversy -- to set the table so anyone knew what was going on.

Sorry, make that:

Hayek's strategic failure in the 1930s and 1940s was being too polite -- no one knew what Hayek was talking about or who he was engaging, because Hayek refused to say, e.g. in his 1936 paper or in his "scientism" essays.

I'm a little afraid of diving in here, but I have to agree with Barkley that Greg should not call so many arguments bullshit. I know perfectly well what the word means in Frankfurt's sense; I read the essay long ago and it influenced my thinking too. But a self-styled Hayekian should hesitate before impugning the motives of other, recalling how easy it is to err in this complex world.

Greg, Thanks for clarifying the best intellectual approaches to debunking baloney; again, it is obvious to me that we have no disagreement.

Sorry, Greg, but that a philosopher got a bestseller does not mean that it is therefore not intellectually vacuous. So, you and Frankfurt want to insist that one can ignore the truth or falsity of someone's statements if you discover that they have an agenda. Really? And how many people spouting off here have agendas also that you do not label as "bs"? Is the important thing that you disapprove of their agendas? If you disapprove of their perceived agendas (eeeeek! Stiglitz approves of Naomi Klein! eeeeek! bullshit bullshit bullshit!!!), then you are free to ignore their arguments and dismiss them by calling names, since that is exactly what this label amounts to. Sorry, Greg, it is intellectually vacuous.

You imply that Mises used this on Marx. Don't think he ever used the term, and you admit that Hayek did not use such tactics, at least in his early career, and certainly both he and Mises never used this silly term in their discourse. This is escape hatch of the intellectually weak.

BTW, I much prefer Dominique LaPorte's History of Shit to Frankfurt's pathetic pile of bs.

It's been some time since you've read the essay, Roger.

Part of the point is that lying has a motivation and a intentionality in relation to true and false which bullshit does not have.

There is more that could be said here.

Roger writes,

"But a self-styled Hayekian should hesitate before impugning the motives of other."

Your aren't at all engaging Frankfurt. And you aren't at all engaging me.

But you are pretending to ... hmmmm.

Barkley writes,

"So, you and Frankfurt want to insist that one can ignore the truth or falsity of someone's statements if you discover that they have an agenda?"

Barkley, do you want to talk about what Mises made efforts to engage in Marx?

How about what Hayek attempted to engage in Lerner?

Or what Frankfurt & many others have attempted to engage in Western Marxism, the Frankfurt School, Drrida & Post Modernism more generally.

You can use whatever words you want. As Popper would say, the words don't matter.

We can use "bologne" for cognitive efforts which disregard true and false, and which attempt to achieve cognitive goals someway on the cheat, whether folks are self aware of that or not. It is clear that Hayek thought Keynes engaged in just that -- he would use whatever argument he could come up with to justify is policy intuitions, and he would abandon that argument at a drop of a hat is conditions changed -- that is Hayek's well considered assessment of Keynes, a man and his work which Hayek knew well.

Barkley, there are phenomena that we need to deal with, generalize over, explain, make sense of, work to correct.

Here is one.

Consistent, repeated, erroneous explications of particular systems of ideas, or bodies of work -- or the ignoring of direct detonation of particular cognitive pictures.


Dierdre McCloskey & significance testing.

Hayek & others on the causal / explanatory emptiness of the general equilibrium construct in economics.

The detonation of indictive logic & Carnapian/Hempelian positivism by Popper & Hayek & Kuhn.

The detonation of behaviorism beginning in the 1940s and advanced most prominently by Chomsky & Hayek.

Popper & others detonation of Freudian psychology.

All of the thousands of erroneous explications of the various dimensions of the work of Hayek, published by the hundreds in all sorts of peer reviewed publications.

And on and on.

Yet the programs detonated continued for decades -- peer reviewed publications continued to be published by the thousands, and PH.D filtered on the grounds of these programs.

Barkley, how are we to talk of these systematic and sophisticated efforts at the genetic fallacy?

How are we to talk of the enormous technologies of justification that have been exposed as fallacious, but which continue to be used to advance an agenda and to attack rivals, e.g. Friedman's bogus account of scientific justification used to endorse agendas in academic economics, and to attack rivals.

The examples could be extended indefinitely.

And part of the problem is the systematic nature of this stuff -- it never goes away, no matter what is shown.

And it mutates and metastasize is all sorts of new forms -- all the while not dealing with what has been exposed to be true.

Um, Greg, to say that another scholar has a bullshitter's (in Frankfurt's sense!) disregard for truth or falsity is to, um, impugn his or her motives, is it not? And I really dislike your earlier crack about "replacement BS" from Dierdre McCloskey. She has clearly demonstrated a devotion to truth.

Frankly, Barkley, one problem with engaging you on any topic is that you never do so in a straight way .. you always float to side issues, you never address directly the issue put directly to you.

I won't characterize the problem further.

You've dances away here, Barkley, to a non-usuful debate about language.

And you've stop defending Stigliz & he was dishing out, which you effectively -- but not directly or very honestly -- conceded.


1) Most of the detonations you refer to involve matters of truth vs falsity, not someone calling out someone else because they have a supposedly wicked agenda. So, to take just one of your examples, it was not Popper's half-baked denunciation of Freudian psychology that did it in intellectually, but the accumulating fact that it does not work to help people in psychotherapy compared with pills based on the study of neurosciencea and biochemistry.

2) I simply get very uncomfortable when somebody starts declaring truth or falsity to be unimportant when agendas are involved. But, Greg, experimental economics has confirmed that the vast majority of people suffer from "confirmation bias." We like to believe things that fit our preconceptions and tend to dismiss annoying facts that do not fit in. In this regard the vast majority of people are bullshitters in the eyes of Hot Dog (sorry, but I really have contempt for this so-called "philosopher"). The outcome of his agenda is having things happen like Hans-Hermann Hoppe emitting Bronx cheers in the middle of a lecture by Pete Boettke.

3) Regarding Stiglitz, what I have agreed with quite readily is that in the quoted portions of this piece being picked on here, he is certainly engaging in ideological ranting involving all kinds of vague generalizations that are disconnected from any supporting facts or data. So, it is not a matter of him distorting facts or misusing facts. There simply are none. It is almost pure ranting, hence not bs'ing, per se.

4) I did point out that what seemed to have him the most steamed is the nature of the debate over the debt ceiling. Indeed, this is an interesting case, because part of his frustration appears to come from what Hot Dog would call bs'ing, people refusing to look facts in the face. Indeed, it is not Obama (nor I) who is bringing on the constitutional crisis. It is the Congress (both parties) by having passed contradictory legislation that forces the president and the secretary to break the law no matter what they do, if the Congress fails to raise the debt ceiling on time.

Am I being direct enough for you, Greg? (Oh, and I'll still take LaPorte's take on shit over Hot Dog's.)

Barkley, I'll take a look at LaPorte.

1) You still don't get the point.

The whole point is that we are NOT dealing with people or rhetorical programs having the purpose of telling lies.

Indeed, we are dealing with a meta-phenomena, how to think about processes of engaging truth and falsity, explanatory success and failure. The issue is that the rivals to the main line in economic science use cheats -- cheats that have been expose, yet in the face of that these rivals have pretended nothing has happened, when these failures and pathologies have been made famous and are widely seen by everyone.

And I disagree with you about Popper & Freud. Popper was a central figure getting people to think about what was wrong -- when everything confirms your theory, you have a problem (just as Krugman's inherently re-adjustable defense of crude Keynesianism has a problem).

Popper got people thinking & got them taking a closer look. It's an historical fact.

2) I don't know what your are talking about here or what it has to do with anything I've said, or anything HF has written.

Confirmation bias is a related issue but in many ways differs categorically from what I'm discussing.

3) I think you are still hedging on Stiglitz.

4) Right. The Dems & the left want to win this, even when the Constitution have given the people's how the power of the purse, and the people elected a clear majority who signed documents promising to those who voted from them they would not raise taxes.

It's all about constructing rhetoric to win this fight over the budget for more run-away government and increases in spending and taxes as high as the eye can see.

It's all pathological, and everyone has a share in the responsibility.

But I doubt we would agree at all on who shares more of the responsibility -- or who is playing a more irresponsible and dishonest game in all this.

All I will remind you is that the Dems made a deal with Reagan to cut 3 dollars for every dollar in tax increases, and what happened is that 3 dollars in taxes were raised for every dollar cut in spending.

And then there is the Bush I betrayal of the taxpayers.

And on and on.

The institutional structure is pathological, and has failed, and need re-working.

The Dems favor keeping the broken system, and favor continuing on a course which will inevitably bring financial and budgetary crisis and failure of monumental proportions. There are no grown ups in the room any more on the left and in the Demo party -- the Dems are Greeks to a man.

And it is unsustainable.

So, Stiglitz is mad as leftists and Dems usually are when they have lost the power to the people & to the GOP -- esp. Dems and leftist who grew up in the 50s and 60s when Dems controlled everything.

They think that is the natural state of the world, and they are mad as hell when the have to deal with the reality that the GOP and the people actually control the country, and the ruling class Dems & left do not.

What are you going to call that, Barkley?

Barkley, this kind of thing has actually happened before.

There are laws, rules and precedents for what happens.

All Obama has to do is stay within those well marked bounds.

Would like to know what story might lie behind anyone having a hate on for Harry Frankfurt ...

Roger, I view the whole overblown "rhetoric" trope as a dodge from taking the central issue of causation and scientific explanation seriously.

To go on and on and make something of an endless game and pun of "rhetoric" and "speaking" and "language" etc. is something other than a scientific approach to economic science.


"And I really dislike your earlier crack about "replacement BS" from Dierdre McCloskey. She has clearly demonstrated a devotion to truth."

When I talked to McCloskey about the parallel between economic explanation and Darwinian explanation, he agreed there was something to it, but he wasn't interested in seriously addressing the question.

The scientific framework of economics as an causal / explanatory enterprise simply wasn't of interest to him.

That was my take away.

How does any of that make McCloskey a bullshitter? By your report, she wasn't much motivated by the parallel to Darwinism. Therefore she doesn't care whether her speech is true or false? You're coming dangerously close to saying that those who do not follow your particular line are bullshitters, which is a pretty odd position for someone who has never succeeded in clarifying what, precisely, his line is anyway.

Roger, built into the Post Modernist "everything is words" picture IS a disregard for the categories of true and false -- it slides into that, and is aiming for that. This school of thought is clearly is part of what motivated Frankfurt to write his essay.

Also, unhelpfully, you are implicitly substituting the word "bullshitter" for the word "liar" -- when this is exactly the contrast Frankfurt is making.

Roger, what part of this don't you understand?

Learning is a CAUSE.

Economic agents LEARN.

The overall coordination of the market presents a design or plan like ORDER.

There is NO agent who has planned that coordination.

The fact that no one has planned that coordination raises a causal PROBLEM.

Economic agents learning in the context of local knowledge and changing relative prices CAUSALLY EXPLAINS the existence of overall design-like coordination.

The existence of an undesigned order explained by a bottom up causal mechanism parallels the explanatory structure of on of the best explanatory strategies in all of science -- Darwinian biology.

Economics is a causal science.

The logical and scientific status of economics has been solved.


ROGER -- what part of that don't you understanding.

Because others are THICK does not mean I have been unclear.

People tend to bullshit about things they really don't care about, which distract them from things they do care about.

I really don't think Deidre McCloskey cares about the cognitive status or scientific status of economics.

She's an economic historian. She wants to make room for historical narratives.

Friedman's fake view of economic science was a road block. McCloskey's "rhetoric" was used as part of the knocking down of this erroneous picture of science, and it opened more room for what McCloskey cares about -- historical narrative.

That's not a bad summary of what is going on.


Have you ever had a face-to-face conversation with Deirdre? Because it's now my turn to call "bullshit" on you. My preferred term for what you're talking about is "making shit up." And right now, you're just "making shit up."

To make that claim about Deirdre is right out of the very playbook you're spending dozens of posts ranting about.

Seriously. Stop it. You're better than that.

I talked with Deidre when she was Donald at the Post Modernist conference at UC-Riverside in the early 1990s.

Steve -- there are very serious problems with the "everything is rhetoric" trope. I've read a lot of McCloskey. Almost everything seems to get swallowed up by this trope.

And it's not like I have anything again narrative explanation.

And I'm one who has seen insight in work on the "narrative" take on scientific explanation in the philosophy of science literature.

It should be clear and I want it to be clear -- I'm not charging Deidre McCloskey with any character flaw.

That is a real misreading of Frankfurt, if anyone other than Roger -- years ago -- has read it.

You haven't given me a hint of what I'm "making shit up" about, Steve.

You could at least do me the favor of that.

"I really don't think Deidre McCloskey cares about the cognitive status or scientific status of economics."

That's a pretty strong claim Greg and one not supported by the evidence that I'm aware of.

And a suggestion Greg: people might be more inclined to respond to you if you put your thoughts into ONE post before hitting send. It's really easier to respond if it's all in one place.

This turns on understanding what the question is. McCloskey's effort is an eliminativist project -- she makes the case for eliminating the question.

It's a legitimate thing to attempt to do.

I'm not saying it isn't.

But I am saying the attempt has a history, has a home in the philosophical literature, and has a motivation internal to economics as a profession, and internal to McCloskey's own interests and history as an economic historian.

The long version would take a paper & and it would require getting all my McCloskey books out of a box.

"That's a pretty strong claim Greg and one not supported by the evidence that I'm aware of."

Let me illustrate my point with a parallel example.

There exists a problem attempting to hook up mental states with brain states, or attempting to hook up meanings or significance with state of the physical world.

Alex Rosenberg doesn't really care about this problem, he solves it by by eliminating it. He's an eliminative materialists. There are not mental states, there are no meanings, etc.

The background here is that the mental state picture gets in the way of his post-positivist / physicalist version of Hume picture of science and reality -- the stuff Rosenberg really cares about.

My suggestion is that McCloskey is in the same position when it comes to the problem of the logical status and scientific status of economics. The "everything is rhetoric" move eliminates the question.

The word sh-t is not permitted at ThinkMarkets.

The word "bullshit" is not the word "shit".

The word "shit" does not make up a part of the literature of informal argument and epistemology.

This focus on the word "shit" is a distraction.

Beavis & Butthead and my 8 year old would be distracted by the "s", "h", "i", "t".

I'm surprised tenured professors are.

Read the Frankfurt piece, if this important angle on the topic raised by Stiglitz interests you.

If not, don't pretend this is about something that would entertain cartoon characters.

Me again - the mercenary advocate. I'm sure everyone here knows more than I do about Austrian and free market economics and the philosophy of science but I suspect I have some Hayekian "local" knowledge about persuasion, successful advocacy and the strategy of argument, particularly in the public policy sphere, that others do not.

There's lots to say here but I will make three points:

a) It seems to me that Mises and Hayek were not ignored in the post-war period because there were insufficiently persuasive, but because they were too persuasive. I am not saying there was a conspiracy - none was/is required. All that's necessary is a predisposition (to quote, probably only semi-accurately, the Canadian columnist David Warren - "there was no conspiracy among Pavlov's dogs"). Since the statists had been routed on the old battlefield, a change of battlefield and a new, less conclusive set of tests was required - enter mathematical economics, econometrics, a movement from market process to equilibrium, etc., etc.,.

b) Here's what (respected monetarist and history of economic thought scholar) David Laidler had to say in a piece about free banking he did for the Bank of Canada ("Free Banking and the Bank of Canada"):

"By the 1950s, developments in economics had created something close to an intellectual consensus, ... according to which, rather than have a monetary system designed to limit the actions of government, its configuration should be such as to help the government pursue a wide range of undoubtedly worthy goals that electorates set for it. No policy apparatus that lacked a central bank, preferably working in close co-operation with other branches of government, seemed complete, and those who questioned this seemed to be either hopelessly unenlightened representatives of conservative political interests, or otherworldly

In other words, flushing free banking (and any discussion of it in the mainstream) down the memory hole was explicitly ideological - no economic "science" there. That certainly sounds to me like the presence of motives other than the pristine search for economic truth.

c) Clearly, you have to meet your opponents’ substantive arguments with equally or more compelling substantive arguments of your own. But scholarly respect I would have thought is a two-way street. But where your opponent ignores, dismisses or distorts your arguments, contradicts himself as and when convenient, or presents as established fact interpretations of the world that are at the very least contentious (if not completely false), or otherwise acts as an advocate rather than as a scholar, then it is perfectly fair to infer the presence of other motives or bad faith and to say so. In fact, I would have thought that pursuit of truth and, in particular, exposing a popular audience to the truth, would demand it.

In addition, the question of motives is in fact often raised by left themselves. They frequently say they are driven by some normative ideal and present themselves as superior ethical beings. We are all familiar with cases in which the claimed concern for humanity is disingenuous. Again, where such claims can be legitimately questioned, the search for the truth requires it. It strikes me that the success of the statists and the left over the decades is due in large part to a failure to successfully question those claims and thus to allow them to maintain the image not only of disinterested scientists and scholars but also of great humanitarians.


Get a sense of humor.


The Internet

Sorry, this didn't come across as a joke:

"The word sh-t is not permitted at ThinkMarkets."

Now that I'm told it's a joke, I still don't get it.

david nh,

Hayek wrote a personal letter to Paul Samuelson, demanding that he stop spreading BS about the argument in his _The Road to Serfdom_.

Samuelson personal promised to remove the passages from his next edition, in a personal letter to Hayek.

Decades later Samuelson confessed he was BSing Hayek when he made the promise, and Samuelson never removed to bogus statements.

I've identified cases were dozens other top economists have written clearly erroneous stuff about Hayek, some of it clear spin, spun to advance a pedagogical or rhetorical goal.

Keynes would do it without any backup argument, as with his famous and constantly requoted "bedlum" bon mot.

It a systematic pathology, one that demands a systematic critique, rather than piecemeal "fact checking".

Steve and Greg,

Status jockeying among fellows on the same side is all well and good (it sharpens wit and argument, etc.), but I hope that the big picture stays in focus. Keynes, Samuelson, and all the other leftists (and rightist) bullshitters are deserving of disdain. Just remember the big picture please; just because we are animals predisposed to seek status does not mean that we must play it out in the same way that less intelligent animals do.

Hi Greg,

Yes, I recall reading a quote from Samuelson awhile back that made my blood run cold. I couldn't escape the suspicion that the economics was at least in part strategic and that it was arrived at by working backwards from the politics.

When you spend your life, as I have, dealing with the tone, mechanics and technique of argument, you develop something of a nose for these things, as unscientific as that sounds. I like to think of it as inarticulable Hayekian knowledge. Cute, eh? (A Canuck yes, but not really a Rush fan).

"one that demands a systematic critique, rather than piecemeal 'fact checking' "

Totally with you. That was to my mind Mises' and Hayek's great strength. And also Rothbard's, although I recognize that here are some "issues" there. They didn't let the other side define the test for victory. They said in effect you may be right on the details, but so what? You're wrong nonetheless. There is no more powerful argument than "you're right on everything except you lose anyway".

The critics of the free market threw up stuff like "people aren't rationale and there isn't perfect competition and the case for free markets is based on all sorts of assumptions" and Mises responded "I don't care/know whether people are rationale and my only assumption is that people act". In other words, "people breathe and think and move around after breathing and thinking". Doesn't sound like too limiting an assumption to me.

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