More Austrian economists do need to analyze the effects of "rent-seeking" as this term applies to the classical definition of rents as a claim on production based on the control of locations that benefit by some natural or societal-made advantage. I would recommend the writing of Professor Fred Foldvary (San Jose State) on this issue. He aligns with Henry George's position that the privatization of location rents is an unjust redistribution of wealth from producers to non-producers.
+Mike Mitchell Yes, I have read what a good deal of what some Austrian economists have written regarding land and its rent. This is not the place to elaborate why I disagree with the reasoning presented. The reason I recommend Fred Foldvary is that he is one Austrian who have integrated the Georgist position into his analysis. An important outcome is that he was one of the few economists who accurately forecasted the 2007 financial and economic crash.
Edward Dodson Well sure, I get he integrated the Georgist position, but he certainly wasn't the only Austrian to accurately call the crash. I guess what I'm wondering is why integrating a flawed position, if it is in fact flawed, would be desirable. What about the guys who predicted the crash without integrating the Georgist view?
+Mike Mitchell Yes, of course other economists (and some non-economists) recognized that the economy was approaching a major asset bubble, fueled by easy and cheap credit. By looking closely at property markets and the underlying land market, the ability to identify stress levels is even greater. The bottom line for me is that the three factor model first developed by political economists going back to Richard Cantillon is far more accurate in describing the dynamics of the real world. Land has a zero cost of production in terms of labor and capital goods input. That is not an arguable point; is descriptive. Henry George (although not the first to do so) made the moral (i.e., prescriptive) argument that all persons have an equal birthright in nature, in land. He then embraced what others endorsed as the practical means of guaranteeing this birthright: the public collection of the potential annual rental value of land. Those who self-describe themselves as Austrian or Libertarian may choose to challenge George based on a different basis for moral justice, but not on his description of real world behavior without facts that contradict George's observations.
Edward Dodson " Land has a zero cost of production in terms of labor and capital goods input." but thats not true, there is always opportunity cost. So if you have land that, say, could bring in $50,000/year growing corn... and say, $80,000/year growing wheat... the cost of growing corn instead of wheat is $30,000/year.
In the realm of economics (or, better stated, political economy) there are natural laws at work; however, these are laws of tendency impacted by externalities. One of the most powerful externalities is positive law enacted by societies, managed and enforced by government. What has always baffled me is the discounting (or ignoring) of the work of the political economists as they thought through the dynamics of human behavior and how we behave in the real world. Long before Ricardo came along, Richard Cantillon advanced a theory of how the factors of production operated and what determined the distribution of wealth. A reading of Cantillon is striking in terms of just how descriptive he is about how the world works. There is another unforeseen consequence of mandating a minimum wage. The increase in disposable income will soon be capitalized into higher land rents, higher property prices and high costs of both rental and owner-occupied housing. Increasing the demand side of a market without a corresponding increase in supply will lead to rising prices. And, of course, what is distinct about land markets is that they do not respond to the so-called price mechanism as do labor and capital goods. Locations do not depreciate in functional utility or value when held out of use as does a building or a machine. Thus, absent (as Cantillon, Smith, Turgot and George argued) a near 100 percent tax on the rent of land, the net imputed or actual rental income stream provides a strong incentive to hoard land, causing an almost continuous rise in the price of what land is offered for development. What few people know is that Milton Friedman joined this group of political economists arguing the case for the taxation of the rent of land. A word in defense of Keynes (but not of most Keynesians). Keynes did not recognize or acknowledge the importance of land markets as a fundamental driver of economies. And, again, the failure to publicly collect the rent of land as proposed by George, economies are doomed to cycles of boom to bust. Keynes was not an advocate of deficit spending. He believed in balanced budgets. What he advocated was budget surpluses during the boom part of the cycle, so that the public sector would have financial reserves to spend when private sector demand softened. Another problem with providing households with income benefits from government is the same as with an increase in the minimum wage (or the more recent movement calling for a basic income guarantee). The benefit will eventually end up in the pockets of landlords. Absent changing the way government raises needed revenue to collect the rent of land, the only policy option is to acquire land (or use existing publicly-held land) to subsidize the cost of constructing new housing units. A similar strategy exists already at a much lower scale in the form of community land trusts, which take the land cost component out of the cost of housing, then set an annual ground rent charge for the leasehold interest in the land based on household income. Most also that establish caps on the resale price of the housing unit itself so that it remains affordable in perpetuity to lower income households.
I don't get it. If someone would voluntarily flip a fair coin to determine if he is or is not going to accept a trade, wouldn't that action indicate true indifference?
Ive studied quantitative economics and to me it always looked like that the talking about market failure starts, if reality doesnt work as indicated by models and or / particular assumptions were violated. The term "Irrational Behavior" (or as I call it: "Emotional Behavior") for example simply results from rational models that assume rational behavior by economic agents / humans. That in reality pretty much no human being behaves perfectly rational / unemotional and this also determines market results, is perceived as a failure. Ridiculous.
Yes, as long as not everyone is an "Übermensch", that assumption is just ridiculous. And is that not what freedom is all about? That we all act differently because of our beliefs and emotions. Not solely of course, but they do influence our rational decisions. humanity is not a hivemind!
Before psychology can properly provide a psychic based theory which would enable us to have 'utils', you can use time units as quasi-utils. Your time is your life, and time is the main reason for scarcity in the realm of opportunity costs. How much time does it take to make a dollar to a rich man and how much time does it take for a poor man? Of course it follows that we should siphon money from the rich to the poor! You are literally saving lives! Use time, and you have enough of utils to dispel any doubt that in the absolute sense, utility is not ordinal, and even to make simple (and not so simple) calculations with these time-utils. Just as saying that some type of profits are objectively wasteful, even if they are valued on the market to a certain value. The market is just wrong, i.e. stealing time from people.
Within the first two minutes of this video Dr. Block confuses logical positivism with Popper's falsificationism. Most of the neopositivists did indeed have a strict and reductionistic view of the sciences, though that was not necessarily an essential part of the core neopositivist doctrine, which is about the *verification* of claims as a criteria of a statement's meaningfulness, an approach which takes a different view of the epistemic status of scientific statements than KarlPopper did with his falsification criteria, which he used to demarcate science from other fields and delimit their epistemic status relative to a statement's enduring irrefutability.
Laz Arus Popper admitted that his falsification criteria is just a rule of thumb. He said this in response to the fact that the proposal that falsification can solve the demarcation problem is itself unfalisfiable. Yes, it is a useful rule of thumb, but it is not a "law", and was never intended to be the basis for a metaphysical system. The demarcation problem, as important as it is, obviously cannot be "solved". The reason is that we cannot predict accurately how we might come to know what we do not yet know. Why? Because to believe such would be to believe that X method of discovery will be applicable to all future knowledge... How could this be proven? Feyerabend, in spite of being (badly) critiqued by Hoppe, did great work on this. Hoppe pointed out that when it comes to practical applications of science, that such issues are unimportant. I agree with him, but why he assumes that practical applications of science are the only important forms of knowledge remains unanswered. That said, when it comes to economics, I'd agree with him.... The demarcation problem being solved or unsolved doesn't seem to impact the practical principles of economics. Of course, not all principles of economics have the level of certainty we can assign to the practical applications of hard science.
Kon Berner I don't believe my original post disputes anything that you've discussed in your reply. Whatever weight Popper wished to give to his falsification criteria, my point was that the logical positivists did not approach scientific claims via Popper's falsificationism, which is what Block confusedly transfers into saying when he begins talking about them. The neopositivists were concerned with **confirmation**, and went to lengths to develop inductive logics they could use to verify scientific claims. Block makes no distinction between the two approaches, he treats them as identical as he introduces logical positivism.
Be that as it may, my point was not about whether or not verificationism is a good theory, my point is simply about what the verification principle actually was to the neopositivists, which Dr. Block seems a bit confused about, since he equates it with Popper's falsificationism in his lecture. Thanks!
We do think in 'utils', for humans, utility is ordinal. Only we do not have a proper scientific language to speak about it in a 'non political' fashion. We are in the situation of people in the 16th century who could have easily said that you cannot measure stuff like surface pressure on water because there is no way to measure whichever units you will try to put there.
That mic has a mind of its own.
More Austrian economists do need to analyze the effects of "rent-seeking" as this term applies to the classical definition of rents as a claim on production based on the control of locations that benefit by some natural or societal-made advantage. I would recommend the writing of Professor Fred Foldvary (San Jose State) on this issue. He aligns with Henry George's position that the privatization of location rents is an unjust redistribution of wealth from producers to non-producers.
+Edward Dodson have you read the various Austrian critiques of the Georgist position? I think they are pretty thorough and take care of the issue.
+Mike Mitchell Yes, I have read what a good deal of what some Austrian economists have written regarding land and its rent. This is not the place to elaborate why I disagree with the reasoning presented. The reason I recommend Fred Foldvary is that he is one Austrian who have integrated the Georgist position into his analysis. An important outcome is that he was one of the few economists who accurately forecasted the 2007 financial and economic crash.
Edward Dodson Well sure, I get he integrated the Georgist position, but he certainly wasn't the only Austrian to accurately call the crash. I guess what I'm wondering is why integrating a flawed position, if it is in fact flawed, would be desirable. What about the guys who predicted the crash without integrating the Georgist view?
+Mike Mitchell Yes, of course other economists (and some non-economists) recognized that the economy was approaching a major asset bubble, fueled by easy and cheap credit. By looking closely at property markets and the underlying land market, the ability to identify stress levels is even greater. The bottom line for me is that the three factor model first developed by political economists going back to Richard Cantillon is far more accurate in describing the dynamics of the real world. Land has a zero cost of production in terms of labor and capital goods input. That is not an arguable point; is descriptive. Henry George (although not the first to do so) made the moral (i.e., prescriptive) argument that all persons have an equal birthright in nature, in land. He then embraced what others endorsed as the practical means of guaranteeing this birthright: the public collection of the potential annual rental value of land. Those who self-describe themselves as Austrian or Libertarian may choose to challenge George based on a different basis for moral justice, but not on his description of real world behavior without facts that contradict George's observations.
Edward Dodson " Land has a zero cost of production in terms of labor and capital goods input."
but thats not true, there is always opportunity cost. So if you have land that, say, could bring in $50,000/year growing corn... and say, $80,000/year growing wheat... the cost of growing corn instead of wheat is $30,000/year.
In the realm of economics (or, better stated, political economy) there are natural laws at work; however, these are laws of tendency impacted by externalities. One of the most powerful externalities is positive law enacted by societies, managed and enforced by government. What has always baffled me is the discounting (or ignoring) of the work of the political economists as they thought through the dynamics of human behavior and how we behave in the real world. Long before Ricardo came along, Richard Cantillon advanced a theory of how the factors of production operated and what determined the distribution of wealth. A reading of Cantillon is striking in terms of just how descriptive he is about how the world works.
There is another unforeseen consequence of mandating a minimum wage. The increase in disposable income will soon be capitalized into higher land rents, higher property prices and high costs of both rental and owner-occupied housing. Increasing the demand side of a market without a corresponding increase in supply will lead to rising prices. And, of course, what is distinct about land markets is that they do not respond to the so-called price mechanism as do labor and capital goods. Locations do not depreciate in functional utility or value when held out of use as does a building or a machine. Thus, absent (as Cantillon, Smith, Turgot and George argued) a near 100 percent tax on the rent of land, the net imputed or actual rental income stream provides a strong incentive to hoard land, causing an almost continuous rise in the price of what land is offered for development. What few people know is that Milton Friedman joined this group of political economists arguing the case for the taxation of the rent of land.
A word in defense of Keynes (but not of most Keynesians). Keynes did not recognize or acknowledge the importance of land markets as a fundamental driver of economies. And, again, the failure to publicly collect the rent of land as proposed by George, economies are doomed to cycles of boom to bust. Keynes was not an advocate of deficit spending. He believed in balanced budgets. What he advocated was budget surpluses during the boom part of the cycle, so that the public sector would have financial reserves to spend when private sector demand softened.
Another problem with providing households with income benefits from government is the same as with an increase in the minimum wage (or the more recent movement calling for a basic income guarantee). The benefit will eventually end up in the pockets of landlords. Absent changing the way government raises needed revenue to collect the rent of land, the only policy option is to acquire land (or use existing publicly-held land) to subsidize the cost of constructing new housing units. A similar strategy exists already at a much lower scale in the form of community land trusts, which take the land cost component out of the cost of housing, then set an annual ground rent charge for the leasehold interest in the land based on household income. Most also that establish caps on the resale price of the housing unit itself so that it remains affordable in perpetuity to lower income households.
I don't get it.
If someone would voluntarily flip a fair coin to determine if he is or is not going to accept a trade, wouldn't that action indicate true indifference?
Ive studied quantitative economics and to me it always looked like that the talking about market failure starts, if reality doesnt work as indicated by models and or / particular assumptions were violated.
The term "Irrational Behavior" (or as I call it: "Emotional Behavior") for example simply results from rational models that assume rational behavior by economic agents / humans. That in reality pretty much no human being behaves perfectly rational / unemotional and this also determines market results, is perceived as a failure. Ridiculous.
Yes, as long as not everyone is an "Übermensch", that assumption is just ridiculous. And is that not what freedom is all about? That we all act differently because of our beliefs and emotions. Not solely of course, but they do influence our rational decisions. humanity is not a hivemind!
You don't need to get cute about our beloved President. It does not add anything to your lecture.
Flesh colored microphones makes me uncomfortable.
Before psychology can properly provide a psychic based theory which would enable us to have 'utils', you can use time units as quasi-utils. Your time is your life, and time is the main reason for scarcity in the realm of opportunity costs. How much time does it take to make a dollar to a rich man and how much time does it take for a poor man? Of course it follows that we should siphon money from the rich to the poor! You are literally saving lives!
Use time, and you have enough of utils to dispel any doubt that in the absolute sense, utility is not ordinal, and even to make simple (and not so simple) calculations with these time-utils. Just as saying that some type of profits are objectively wasteful, even if they are valued on the market to a certain value. The market is just wrong, i.e. stealing time from people.
Well, us political economists love: Government Failure! So its bot true that all economists love market failure :)
Within the first two minutes of this video Dr. Block confuses logical positivism with Popper's falsificationism. Most of the neopositivists did indeed have a strict and reductionistic view of the sciences, though that was not necessarily an essential part of the core neopositivist doctrine, which is about the *verification* of claims as a criteria of a statement's meaningfulness, an approach which takes a different view of the epistemic status of scientific statements than KarlPopper did with his falsification criteria, which he used to demarcate science from other fields and delimit their epistemic status relative to a statement's enduring irrefutability.
Laz Arus Popper admitted that his falsification criteria is just a rule of thumb. He said this in response to the fact that the proposal that falsification can solve the demarcation problem is itself unfalisfiable. Yes, it is a useful rule of thumb, but it is not a "law", and was never intended to be the basis for a metaphysical system.
The demarcation problem, as important as it is, obviously cannot be "solved". The reason is that we cannot predict accurately how we might come to know what we do not yet know. Why? Because to believe such would be to believe that X method of discovery will be applicable to all future knowledge... How could this be proven?
Feyerabend, in spite of being (badly) critiqued by Hoppe, did great work on this. Hoppe pointed out that when it comes to practical applications of science, that such issues are unimportant. I agree with him, but why he assumes that practical applications of science are the only important forms of knowledge remains unanswered. That said, when it comes to economics, I'd agree with him.... The demarcation problem being solved or unsolved doesn't seem to impact the practical principles of economics. Of course, not all principles of economics have the level of certainty we can assign to the practical applications of hard science.
Kon Berner I don't believe my original post disputes anything that you've discussed in your reply. Whatever weight Popper wished to give to his falsification criteria, my point was that the logical positivists did not approach scientific claims via Popper's falsificationism, which is what Block confusedly transfers into saying when he begins talking about them. The neopositivists were concerned with **confirmation**, and went to lengths to develop inductive logics they could use to verify scientific claims. Block makes no distinction between the two approaches, he treats them as identical as he introduces logical positivism.
Laz Arus You cannot verify geometric axioms. Yet you can make numerous truthful claims using geometry. It's the same thing with AE.
Be that as it may, my point was not about whether or not verificationism is a good theory, my point is simply about what the verification principle actually was to the neopositivists, which Dr. Block seems a bit confused about, since he equates it with Popper's falsificationism in his lecture. Thanks!
Laz Arus thanks for clarifying
We do think in 'utils', for humans, utility is ordinal. Only we do not have a proper scientific language to speak about it in a 'non political' fashion. We are in the situation of people in the 16th century who could have easily said that you cannot measure stuff like surface pressure on water because there is no way to measure whichever units you will try to put there.
Damn Australian economics!