Tuesday, September 28, 2010

Best catch phrase ever!!!

"Tu Ne Cede Malis"
(Do not give in to evil)

I have been researching Austrian Economics lately, which I happened upon after wanting to know more about F.A.Hayek, author of Road to Serfdom and subject of EconStory's awesome rap battle video between Hayek and J.M. Keynes.. who is a discredited jerk.

Ludwig von Mises was Hayek's teacher and is the gentleman on the coin above with the kick-a** catch phrase "Do not give in to evil".

The most well-known Austrian Economist today is Ron Paul, a US Congressman from Texas.


I follow the blog of Greg Mankiw, an Economics professor at Harvard, and wondered what he thought of Austrian Economics, being a respected scholar in the field. I emailed him yesterday with that simple question and he wrote me back within five minutes and directed me to his 2006 blog post on the topic.

In short, he read Road to Serfdom and liked it,and to his credit, assigned it to his students to read, but otherwise does not know anything about it. ("First, most economists at research universities focus their attention on recent work. Things written more than twenty or thirty years ago are usually assumed to be irrelevant, out-dated, or incorporated into more recent work... for the same reason that physicists don't read Newton in the original.")

I would really hope that both economists and physicists would read the original historical texts, if for no other reason than to know why the texts are so respected. Newton, for example wrote most of his works over 300 years ago and they are still largely relevant today! By contrast, the textbooks and studies of today's scholars will largely be irrelevant, admittedly, within 20-30 years. I would hope that professors and textbook authors would be educated in the timeless truths of original sources, in addition to the constantly shifting truths of today.

Now, Mankiw writes textbooks. I would like to think that if one considers themselves literate in their field to the extent that they feel compelled to write a textbook, they would have read and comprehended all the theories within their field and the works of historical and timeless authorities, to merit their ability and authority to speak of it. But, Mankiw admits that he is only knowledgeable of current economic works, and discards anything older than 30 years old. This causes his thinking to be mere echoes of others around him, rather than rooted in economic history, theory and timeless truths. When you only concentrate on the narrow window of the present, you ignore all of history and are doomed to repeat it. You become a mere pawn of those who do know history and use their knowledge to achieve their desired future results.

I argue that Mankiw's academic method places too much faith in the current experts of our time and assumes them to be far more literate in their field than reality merits. To be a true authority I would expect a good knowledge of all theories within the field and their historical results. I am extremely disappointed that he saw and acknowledged this weakness in 2006, and when asked again in 2010 he has not yet amended it.

That said, his blog is pretty interesting, well stated and over-all, fairly sensible... though it is reflecting current popular economic thought, rightly or wrongly, which I guess should be of no surprise.

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