11

Your marginal rate of substitution between (say) eggs and wine is the number of eggs you'd be willing to trade for one additional bottle of wine. This marginal rate of substitution can reflect your preferences (if you're a consumer) or the state of technology (if you're a producer who can, for example, substitute three eggs for one wine in your production ...


11

In this paper (pdf), Peter Boettke goes into great depth explaining the difference between the two concepts in the Austrian school. Essentially information is any data that might influence an act (or specifically the perceived utility or cost of a choice), and knowledge is the information that the actor has already collected prior to the time they made ...


5

Material capital is any durable good that is used as a factor of production and, by virtue of being durable, it is gradually consumed in production over a maximum possible duration of a length that is determined by (i) how much a unit of capital is used and (ii) the depreciation rate of a unit of capital. Capital forms by labor and savings (which is in ...


5

Although I disagree with von Mises, he was reacting to what he saw as a very real problem, which was the use of relatively primitive statistical methods to describe behavior. In fact, Leonard Jimmie Savage's work on probability and statistics should have been sufficient to meet his objections, although the computational speed would not have yet existed for ...


4

As a disclaimer, I think the Austrian business cycle is incorrect. I will try to explain in a sympathetic fashion. Mises.org has a great deal of resources on Austrian economics, much of it free. From a quick watch of the beginning of the video, the distinction is between a market rate of interest, and the “artificial” interest rate set by the central bank. ...


3

I too also think the austrian theory of the business cycle is incorrect but will offer a sympathetic answer. It really about understanding how the theory related to the structure of production and how lower interest rates incentives activities that are further behind in this structure and extends the time for this process to occur. Its interpreted as a ...


3

This article states: In both of his seminal works in political theory, The Constitution of Liberty and Law, Legislation and Liberty, Hayek endorsed as a legitimate function of the state the power to regulate monopolies and curtail industry practices in restraint of trade. For example, in the first book, in Chapter 15, Hayek ...


3

Your first quote makes it clear that "thymology" is a wilfully abstruse word for psychology (though it's unclear why only male psychology is considered). And psychology has been part of economics for as long as economics has been discussed. You can find psychology in Adam Smith and Aristotle. There was something of a barren period within the twentieth ...


3

This is how I view it. At the very core of economics, is each and every human on this earth making decisions he or her thinks are in his or hers best interest. In real life, we do not calculate utility before making a decision or compute any expected values; we do what feels right at the moment. Taking the cross-section of human decisions, economists try to ...


2

As with inflation, so long as deflation is expected, there is no distortion. The expected deflation is simply built into interest rates. For example, if I expect deflation to be 1% per year and I am looking for a 5% real return on an investment, then I'll look for investments with a 4% nominal return.


2

The first scholar to model the intuition behind the political business cycle is William Nordhaus in a REStud article (1975). Nordhaus (1975) is thus widely believed to be the seminal article in the literature: https://www.jstor.org/stable/2296528?seq=1#page_scan_tab_contents


2

Quick Wikipedia found : https://en.wikipedia.org/wiki/Business_cycle Look at the section of Politically based business cycle The political business cycle theory is strongly linked to the name of Michał Kalecki who discussed "the reluctance of the 'captains of industry' to accept government intervention in the matter of employment." https://en....


2

I am asking whether or not it fully expounds some first cause of human action from which we can deduce answers to other questions about human economic behavior? What it is getting at: Praxeology [the science of human action] says that all economic propositions which claim to be true must be shown to be deducible by means of formal logic from the ...


2

Mathematics has axioms. The study of Logic, as a formal subject in itself, has axioms. Empirical sciences do not have axioms. The physical sciences don't have axioms. Pretending economics was an a priori science was an act of intellectual dishonesty, in order to provide a pseudo-intellectual basis for the counter-empirical work of the Austrians.


2

You've asked a rather broad question. In a way, what you've asked, is "how do we learn?" more than one tool for the job Do you believe in circular saws? Do you believe in handsaws? How can you believe in both, when they both claim to do the same job, but are completely different things? how not to pick an economic philosophy At our worst, we humans ...


2

From a Marxist perspective, capital is a social relation. Essentially, it is money that begets more money. As such, it only becomes more or less synonim with "means of production" once it takes over production, ie, once society becomes capitalist. In a feudal society, tools and land are not capital, albeit being means of production. The money of money ...


1

The issue is more complex than your friend suggest and he is not completely right but at the same time there is a kernel of truth to what he is claiming. There are differences in the effect of savings short and medium and long run. However, to fully explain this I will have to use some math to ground the reasoning and make everything consistent. Consider ...


1

Copyright as a private contract is an entirely different thing than the concept of "intellectual property". While it is difficult to quote a single, unified view on the issue, I would think most Austrians reject "intellectual property" for the following two reasons: 1. the concept is defined and enforced by a state authority; 2. Austrians do not consider a ...


1

Prices are easy to observe. However, they do not contain information about externalities (or other market imperfections), so while they are the most commonly used source of information by consumers and producers, it is debatable whether they are the "best" information.


1

Concerning austrians and their general attitude towards prices: https://mises.org/library/source-prices. In short Mises says that The ultimate source of the determination of prices is the value judgments of the consumers. If the value of judgement of consumers is higher than the cost of production, producers know it is worthwhile to produce that good. ...


1

As with all the others, I would agree "no." I am only treating the first sentence as the axiom as the "corollary" implied in the second sentence is actually less clear. As the axiom I am taking it to be Human action is purposeful behavior This could almost make it as a game theory axiom. de Finetti's coherence principle, for example, or Cox's axioms ...


1

As a statement about human behaviour in general, it is a question of philosophy and psychology. However, economics is generally viewed as a study of decision-making, and not generic human behaviour. Since you can always rationalise any economic decision as being "your will," the statement appears to be true, but has little predictive power. Alternatively, ...


1

It doesn't allow for a full description of people's behavior and Mises says as much in Human Action. Data is needed as well. The Action Axiom simply states that people will select the best known means to achieve their preferred goal. To specifically describe the particular action of time and place, then, we need to know the individual's goals and the means ...


1

Murray Rothbard gave a "natural rights" justification for an AnCap society. David Friedman (son of Milton Friedman) discusses and gives a consequentialist defence for an Anarcho-Capitalist society. It's discussed in his book 'The Machinery of Freedom' and references 14th century Iceland for an approximation of how a society based on private laws and courts ...


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