Keynesian vs. Austrian economics made simple – Good analogy?

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  • Sat, Oct 06, 2012 - 08:21pm

    #31

    ralfy

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    They are two sides of the

They are two sides of the same coin in light of global capitalism.

 

  • Mon, Nov 19, 2012 - 03:54pm

    #32
    yamfood

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    This is a great analogy.  The

This is a great analogy.  The problem is that if we allow the government to implement Austrian school “policies” we will have even worse disasters like when the controlled burn destroyed those houses in the story. 

What we need to do is remove the government entirely from the economic sphere, but good luck doing that.  Solution?  Eliminate the goverrnment completely.  When we allow people to rule us like slaves then we will used like slaves.  But it is mental slavery.  If you see your chains you break them.

 

 

  • Thu, Dec 13, 2012 - 02:14am

    #33

    ralfy

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    Done deal. How do you think

Done deal. How do you think unregulated derivatives rose to between $600 trillion to over $1.2 quadrillion worldwide?

 

 

 

  • Mon, Aug 12, 2013 - 08:38am

    #34
    matrim

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    NFL vs… Handball

Very cool to hear from a member of NFL – especially on a dry academic topic like Keynian vs Austrian economics – sorry to show my stereotyping of NFL players, and I am glad that brianacs exists there 😉

Since you are aware that fans are the only reasons you are paid to play, let's do a bit of thought experiment. Given that handball isn't exactly popular in United States, do you suppose there would be many fans turn into watching handball? And let's say that a handball league is formed, and because they are comprised of sons/daughters of the current congress, so congress passes a law saying that TV networks must give a contract to carry the handball league's games. Because such law has been passed, and TV networks decides to pass the cost to the consumers, and when the consumers complained because they do not care about handball, so TV networks decide to drop NFL instead to help cover the cost – do you think that's fair?

The example might be contrived, but the point isn't. Market isn't exactly very forgiving, but market knows what the customers want and don't want – and it's designed to meet the demand. Any time you decide to save the job for the 50 year-old that's about 10 year from retirement, you are asking consumers to bear the cost. While it might be sentimental to save that job – do you, or anyone else, really want to pay for it?

100+ years ago, there used to be large corporations providing "ice carving" services. They will centrally create, store, and carve ice and distribute the ice to households. This helps protect food from spoiling, before you know it, refrigerators were invented. 

Do you want government to protect that service from going extinct in the name of protecting jobs? Or do you want the convenience brought to you by refrigerators? 

There are no simple answers in economics, but one thing is clear – those who think jobs should be saved simply only consider very few angles and fall for sound bites.  Because when they become customers themselves, they would never have chosen such outcomes, but because when they consider things in abstract, they can say it's best to save jobs, because they don't understand the cost associated with it.

Until it impacts them.

Waves of changes are upon us – whether we like it or not. It's not about protecting the 50 year old from it, but rather – how can we help those 50 year old adapt to the new change as soon as possible.

Or maybe – when NFL stop being popular – you'll lobby the government to protect NFL jobs.

 

 

 

  • Thu, May 07, 2015 - 08:49pm

    #35
    god0fthunder

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    I don’t think that this analogy quite works.

I think the analogy would be better if it took into consideration the falsehood of Keynesian Economics. Austrian would be to let the forest burn as it always had and naturally does. Keynesian would be when the forest overgrows and becomes a tinder box, instead of it being small and letting it put itself out, they would to cover the forest with a mural that makes it look like a healthy forest while planting new trees in the burning forest that will only burn themselves and make the inferno worse in time. Maybe they would put out the fire on some of the big trees to make sure people think the forest is healthy while artificially "fixing" the problem when they are actually delaying it and exacerbating it.

  • Thu, May 07, 2015 - 09:48pm

    #36
    Time2help

    Time2help

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    The world economy

…in it's current state could best be summed up, IMO, using this word:

Boondoggle (noun), def'n:  A project that is considered a useless waste of both time and money, yet is often continued due to extraneous policy or political motivations.

  • Thu, Aug 27, 2015 - 05:19pm

    #37
    baileymarie89

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    Interesting analogy. What is

Interesting analogy. What is your take on the inflation debate? Do you side with Inflation from an Austrian standpoint or Keynesian

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