Talk:Austrian business cycle theory/Archives/2010/April

EconStories

I've added this educational video into the External Links because (1) Lots of WP links relate to non-academic sites (2) this has garnered over 1 million hits and has been featured on PBS so isn't in any way non-notable (3) It's educational for the Y and Z generation (4) It's a funny (or at least fun) way of learning about macro (5) It's not really pushing ABCT or Keynesianism but fairly presents both perspectives. I hope this can stay. Thoughts please. —Preceding unsigned comment added by 203.63.130.65 (talk) 10:35-10:37, 6 April 2010 (UTC)

Noting Appropriate Weight (in the lead)

For context the text containing the dispute is quoted here. Text in bold is the disputed passage:

The Austrian business cycle theory ("ABCT") is an explanation of the primary causes of business cycles held by the heterodox Austrian School of economics, a school of thought whose methods of deriving theories has been criticized by mainstream economists as being a priori[1] and differing from contemporary scientific practices.[2][3][4]

I contend that the lead has not conformed to WP:UNDUE, by failing to note the relation of the [largely a priori] formulation of the "theory" to mainstream practices. This problem becomes significant due to the use of the term "theory" in this economic topic, since -- in the context of technical explanation by a "school" -- the word theory is apt to invoke the connotation of of the word which basically means a "scientific theory"; this likely leads further to an assumption of there being an underlying utilization of contemporary scientific practices [i.e., the scientific method]. The Austrian school is known for those who pride themselves on a rejection of these "contemporary scientific practices," so it seems appropriate to make sure the potential for misunderstanding is ameliorated. I've edited the current version to avoid the negative connotation associated with the word "unscientific," but I'm quite receptive to any suggestions that would eliminate both the WP:UNDUE issue and any semantic misunderstandings. BigK HeX (talk) 00:05, 13 April 2010 (UTC)

Done. By the way, all of this is just a click away on AS. Why it needs to be highlighted in a SUB-SET of AS is, frankly, beyond me. We could also put a "Warning: This is UNscientific!!!" sticker across the top of the AS page, but there's no need to do this on the ABCT page, which refs the AS page in the first sentence. By the way, Steve Keen and others accuse the mainstream of being unscientific. Should we put that in WP as well? —Preceding unsigned comment added by 210.9.82.209 (talk) 06:04, 13 April 2010 (UTC)

I don't see what you've done other than to add the word "heterodox"....? That alone would do little other than to revert the article back to the same state which prompts the problems I raised earlier. Austrians pride themselves on deriving the ABCT theory in a manner inconsistent with the general practice of deriving theories in science. That is obviously relevant to THIS article ... I don't find the objection where we should assume that a reader has a sufficient background of the criticisms found in another article to be a persuasive argument. At this point, your worst objection of the cited, relevant, and policy-driven text is to vaguely dismiss it as "graffiti" and propose that we make assumptions on the readers' background; I'd ask that base your edits on more policy-oriented objections. BigK HeX (talk) 07:00, 13 April 2010 (UTC)

As for, "By the way, Steve Keen and others accuse the mainstream of being unscientific. Should we put that in WP as well?"

Are you seriously proposing this tiny minority opinion as an analogy for the prevalent, widespread view of a priori theorizing that we're discussing here with the Austrians? BigK HeX (talk) 07:13, 13 April 2010 (UTC)

You've missed my point. The point is that there is no need to take a particular aspect of AS and blow it up in the lede. I could argue that this is important to add "ABCT is a theory advocated by the Austrian School, a school that considers fractional reserve banking a fraudulent, immoral, Ponzi-like activity responsible for most - if not all - of the economic misery in the world today (ref: Murrary Rothbard)". That's obviously POV-pushing. Yours is too. Because it's distorted. It is highly unlikely anyone would be confused by the term "theory" and if they were they would have no idea about the AS - in which case they should click on the link and find out. ABCT is a sub-set of AS. It's appropriate to presume that someone going into ABCT would either click on AS or have some passing familiarity with AS. —Preceding unsigned comment added by 210.9.82.209 (talk) 07:23, 13 April 2010 (UTC)

That's not appropriate, and neither is your analogy accurate. As this edit is DIRECTLY relevant to THIS article, there certainly is justification for adding it. The bottom line is that the ABCT departs SIGNIFICANTLY from the mainstream in its very derivation. I suppose you're going to force me to quote policy....

• The majority view should be explained in sufficient detail that the reader may understand how the minority view differs from it,and controversies regarding parts of the minority view should be clearly identified and explained. How much detail is required depends on the subject: For instance, articles on historical views such as flat earth, with few or no modern proponents, may be able to briefly state the modern position, and then go on to discuss the history of the idea in great detail, neutrally presenting the history of a now-discredited belief. Other minority views may require much more extensive description of the majority view in order to avoid misleading the reader.

In this case, we discussing exactly the problem of readers potentially being misled. Most academic theories in the sciences are (obviously) assumed to be derived by the methods common to that particular science, and being that THIS IS NOT THE CASE, policy encourages us to note it. You may not like the edit, but your disdain does not override policy. I'm willing to compromise, if there's a policy-based justification to your objections. BigK HeX (talk) 07:38, 13 April 2010 (UTC)

All of this is dealt with (over and over) in the BODY of the article. The policy issues you raise are completely irrelevant to the issue at hand: Whether this "warning" should appear in the lede. If someone is only going to read the first sentence, they are idiots. They should read the whole article - at least all of the lede. We're talking about different issues - I'm talking about weight in the lede and you're talking about weight in the article. It couldn't be clearer:

"The Austrian explanation of the business cycle varies significantly from the mainstream understanding of business cycles, and is generally rejected by mainstream economists. Economists such as Milton Friedman,[5][6] Gordon Tullock,[7] Bryan Caplan,[8] and Paul Krugman[9] have said that they regard the theory as incorrect." —Preceding unsigned comment added by 210.9.82.209 (talk) 07:45, 13 April 2010 (UTC)

As already mentioned in my first statement here, NONE of that text (or anything else in the lead) notes how the very derivation of the Austrian theory is also a significant departure from the mainstream. If the theory is created by means which differ in significant ways from the way that the mainstream creates theories, I think it's misleading not to make sure that such a difference is made explicit before any misunderstanding can take hold. BigK HeX (talk) 07:51, 13 April 2010 (UTC)

There's no need to be so paternalistic. No misunderstanding will take hold within 3 paragraphs. This is dealt with on the AS page (on and on and on...). You're assuming the reader is an idiot unfamiliar with AS. There is no need to make such an assumption. And if they click on the link to AS that will cure their problem (ignorance of the subtle points on AS, not their idiocy). —Preceding unsigned comment added by 210.9.82.209 (talk) 07:56, 13 April 2010 (UTC)

Third opinion

Hey. First, anon IP, please sign your comments by putting four tildes (~~~~) after your comments. By doing so, you make this page easier to read since it's clear who said what. Onto the issue at hand. On the one hand, I don't think that the text discrediting the Austrian school belongs in the first sentence. It starts the article off with a skewed POV by immediately slamming the topic. On the other hand, it's clear that the theory has been discredited, so that text does belong somewhere in the lead so as to accurately summarize the article. I've since moved it down to the third paragraph in the lead, since that's the part that discusses discrediting the topic. In this way, the lead starts off by explaining the theory, how it works and the supposed logic behind it, and then points out how people believe it to be flawed. Thoughts? — HelloAnnyong ^{(say whaaat?!)} 20:48, 13 April 2010 (UTC)

The purpose is to avoid any confusion between "Austrian Business Cycle Theory" with the general understanding of "scientific theories" (based on the scientific method); it seems that has been achieved, so deferring to your neutral opinion works perfectly for me. Thanks for your time and effort! BigK HeX (talk) 20:55, 13 April 2010 (UTC)

• Fourth opinion from someone who has contributed significantly to the page (adding mainly critiques but also supports): starting off the page with a highly POV statement is not going to fly. It's clearly POV to label the theory "unscientific" immediately, and in general that label is POV and needs to be attributed per WP:ATTRIBUTEPOV - which is done, so that's OK. It's out of place to critique Austrian economics in an article particularly about ABCT unless the connection is made by the source. Referencing Samuelson's AER review article (footnote 10) seems odd and out of place - the quote does not mention Austrian economics and it is not clear if Austrian economics is ever discussed, for a clear [WP:SYNTH]] violation. Further, it is rather odd considering that economics is designed around using unrealistic a priori assumptions (see Economics#Theory) and is notorious for lacking in empirical foundations (e.g., microfoundations), and everyone who knows economics understands that it generally does not follow the traditional scientific method (see Economics#Empirical_investigation). So this new material is odd and makes Wikipedia seem uninformed about basic principles of economics. II | (t - c) 21:21, 13 April 2010 (UTC)

Attempts to draw some sort of equivalence between the empirical approach common throughout mainstream economics versus the well-known rejection of inferencing from empirical data common to the Austrian school seems odd. Clearly, the two approaches are significantly different, and that difference is now noted.

I'll note that ImperfectlyInformed's edit comment seems odd as well, since there was nothing in the edit which presented "POV as truth." I'm not really sure how any reading of that text missed the clear qualifiers present. BigK HeX (talk) 21:29, 13 April 2010 (UTC)

I'll apologize for the edit comment; you're right that it was off the mark. I don't mind if you mention the problems with Austrian school's approach as long as (1) the critique is clearly connected to this theory, (2) the reference clearly and directly supports the statement, and (3) the wording is such that it is not confusing and the critique could not be applied to mainstream economics. The current sentence of "Further, the Austrian school's methods of deriving theories have been criticized by mainstream economists as being a priori[10] and differing from general scientific practices[11][12][8]" does not meet any of these. Mainstream economics accepts the fact that its theories have generally been established a priori (a fact affirmed by Mayer, ref 11). Mainstream economics methods differs substantially from general science practices. Reference 12 is in an Austrian journal - please provide the quote. Reference 8 is a blog post which doesn't say anything about general scientific practices. This looks like a lot of WP:SYNTH. Incidentally, I'm no expert on Austrian economics but it seems likely a strawman to say that they reject inferences from empirical data. They reject econometrics and mathematical models as oversimplifying empirical data. There is a difference. Ironically, you might read Mayer - the reference you introduced - linked above to understand the difference a bit better. II | (t - c) 22:07, 13 April 2010 (UTC)

I'm aware of the difference, but there is still little equivalence. Despite any practical difficulties encountered in the mainstream, the Austrian approach still represents a significant departure.... or to quote a couple of Mayer's relevant passages,

Boettke's strictures against the use of mathematics are off target. The dispute about the feasibility of using mathematics to produce good economics is over.[2] ...The lesser fruitfulness of Austrian economics in the hands of most economists is due not only to its focus on "big" problems, but also to the much smaller role that Austrians give to that great source of work for many economists, empirical work. Many Austrians consider econometrics to be useless. Leading Austrians reject on methodological grounds the validly of aggregates, such as the price level. Thus Hayek (1935, p. 5) wrote: "from the very nature of economic theory, averages can never form a link in its reasoning." Austrians therefore reject as inapplicable to the study of society the instrumentalism that is used so much in the natural sciences .... Those who criticized the use of mathematics in economics made a bad case by arguing that it is of little use. There is by now massive evidence to the contrary.

In any case, being that Austrians largely pride themselves on the differences between the goals of their respective methodologies, it seems strange to object to that issue being noted. Of course, if there's better wording to be had in conveying this difference, then I'm all for it. BigK HeX (talk) 22:28, 13 April 2010 (UTC)

Please don't presume to know what Austrians "pride themselves" on. Austrians pride themselves on being the only School to identify fractional reserve banking as fraud, as a Ponzi scheme, as counterfeiting (at least when the whole scam collapses and QE inevitably kicks in). Given that ABCT is about FRB and its destructive effects, perhaps this should be added in as well, as (1) It is a unique feature of AS (2) It is something that AS adherents "pride themselves on" (MR for eg) (3) It is DIRECTLY relevant to this article. In fact, you can't understand ABCT without understanding the AS's arguments against FRB. You are picking amongst a multitude of "unique" features. Why?GreenGooIsaGreatActor (talk) 04:24, 14 April 2010 (UTC)

WP:NOTSOAPBOX. To claim that Austrians don't promote the "strength" of their methodology would be asanine. But, it's clear you objected to my comment -- not because you actually disagree -- but merely in order to setup the posting of the above screed. Hope you feel better now, KarmaIsKing.

If you really feel that you need to hash out some facts with me, then feel free to move any distracting soapboxing to my talk page, where it won't interfere with actual productive efforts. BigK HeX (talk) 04:40, 14 April 2010 (UTC)

I can't help it if you keep digging holes for yourself. That's karma - if you push, the same arguments can apply across the board. Let that be a lesson for us all. —Preceding unsigned comment added by GreenGooIsaGreatActor (talk • contribs) 09:23, 14 April 2010 (UTC)

The above user is likely another sockpuppet of Karmaisking. LK (talk) 10:46, 14 April 2010 (UTC)