The interventionist in advocating additional public expenditure is not aware of the fact that the funds available are limited. He does not realize that increasing expenditure in one department enjoins restricting it in other departments. In his opinion there is plenty of money available. The income and wealth of the rich can be freely tapped. In recommending a greater allowance for the schools he simply stresses the point that it would be a good thing to spend more for education. He does not venture to prove that to raise the budgetary allowance for schools is more expedient than to raise that of another department, e.g., that of health. It never occurs to him that grave arguments could be advanced in favor of restricting public spending and lowering the burden of taxation. The champions of cuts in the budget are in his eyes merely the defenders of the manifestly unfair class interests of the rich. …
The notorious principle that, whereas private expenditures depend on the size of income available, public revenues must be regulated according to expenditures, refutes itself.
An essential point in the social philosophy of interventionism is the existence of an inexhaustible fund which can be squeezed forever. The whole system of interventionism collapses when this fountain is drained off: The Santa Claus principle liquidates itself. —
Merry Christmas, y’all.
spoke to an “Austrian” economics student
me: All I have heard is that the Austrians don’t advocate the use of math.
austrian: We use math.
austrian: We just try to not use math as a means of modeling everything.
me: I suppose it’s sensible that we cannot model everything and everyone’s individual preferences. So where does the criticism of Austrians’ love/hate relationship with math come from then?
austrian: An organic system such as the economy is best left without implementing policies based off faulty math.
me: So the whole deal is that you don’t use a lot of math? Is that it?
I don’t get it. There is nothing wrong with utilizing math to help predict the effects of a policy, but does the Austrian school of thought toss math to the sidelines 90% of the time?
Austrians don’t like mathematically modeling behavior because they think that you can’t.
You can. It’s what neoclassical economics has done using the same ideas Austrians had (utility maxizing individuals, preferences, etc etc)
Perhaps economics could be mathematically organized if we had perfect information and all participants practiced rational behavior that can also be quantified.
But we don’t always have perfect information, the info we do have can’t always be extrapolated and actors are certainly not always rational.
But I do agree that if math can be utilized, then by all means, do so. I’m just not convinced that it can always be utilized as an effective tool.