Chapter 30 of 30 · Is the Market a Test of Truth and Beauty?: Essays in Political Economy by Leland B. Yeager
Index
Index
A
Abortion issue, example of special interests, 330
Absorption approach, balance-of-payments, 276
Academic game
economics, 251-254
methodology and rigor, 233
Activism. See also Regulation
and democracy, 329
hobbyists, 331
judicial activism, 336
Alexander, Sidney S., elasticities, 276
Allais, Maurice
academic incentives and games, 252
changes in tastes, taxes or policies, 215, 216
inflation, 220
land: diversion and willingness to wait, 212-214
savers and money, 219
Allocation effects, inflation, 220
America. See United States of
America Anarcho-capitalist-Lockean rights, 457
Anderson, Benjamin M., gold standard, 202
Appropriation. See Entitlements; Social justice; Taxation
Armchair theorizing, George, 65
Arts, public funding of, 324
Austria, gold standard, 191,195
Austrian School of Economics, 100-115
attention to process, 137
business cycle, 149
complementary schools, 113
coordination, 131
criticisms of, 103-105
macroeconomics, 152
marketplace of ideas, 107-113
neoclassical economics, 105-107
strengths, 100-103
Authoritarianism, relativism, fallibilism, 486-488
Axioms
rights, 481
Rothbard: rights, 430-435
B
Balance-of-payments, tautology, 274-277
Bartley, William Warren, III, justificationism, 235
Bellamy, Edward, uchronia, 389
Biology, tautologies, 271 Blackmail, Rothbard: property rights, 434
Blanshard, Brand, political rights and duties, 501
Block, Walter, morality and law, 435-439
Bohr, Niels, principle of complementarity, 275
Booms. See Business cycle
Boyle, Joseph M., determinism: self-referential problem of, 297
Britain, Hutt on postwar Britain, 179
Brockway, George, Keynes, 161
Broome, John, contractarianism, 483
Brown, E.H. Phelps, general equilibrium theory equation systems, 14
Buchanan, James academic incentives and games, 251-254
neoclassical economics, 106
social contract, 488-490
truth judgment, 485
Budget constraints
limits on government expenditures, 343
as tautologies, 273
Bureaucracy and government regulation, 335
political economy, 317
Business cycle
econometrics, 241
money: Hutt, 181
C
Cagan, Philip, money: econometrics, 242
Calculation
knowledge, 93-99
Mises and Hayek, 131
socialism, 86
Campbell, C.A., descriptive and prescriptive laws, 285
Capital
capital formation: money and, 217-222
and interest theory: subjectivism, 36-38
land and international capital movements, 211
macroeconomics, 149
willingness to wait, 212
Capital-import-and-export arguments for trade intervention, general equilibrium theory, 12
Capitalism, Kirzner: morality of capitalism and profit, 407-421
Cassel, Gustav
general equilibrium theory equation systems, 13
subjectivism, 46
Causality
determinism, 291
general equilibrium theory, 10
Chamberlin, T.C., competing hypotheses, 246
Chance, ethics, 292-295
Churchill, Winston, on voters and democracy, 376
Citation indexes, measuring academic excellence, 111, 119
Classical school. See also New
Classical school Classification, tautologies, 271
Clower, Robert
coordination, 130
on general equilibrium theory, 4
methodology, 232
Coase-Buchanan concept of cost, 42
Coase, R.H., pricing and socialism, 78
Cognitive dissonance, 354
Collateral effects, general equilibrium theory, 12
Collectibles, 217
Comparable worth fallacy, subjectivism, 25
Competing hypotheses, methodology, 246-248
Complementarity, principle of, 275
Complexity
ethics, 289-292
general equilibrium theory, 7
Concepts, role in economics, 349
Constitutional monarchy, versus democracy, 375-387
Consumers
consumer-surplus: general equilibrium theory, 11
consumers’ sovereignty: subjectivism, 29
knowledge and coordination, 28
Contagion. See Business cycle Contractarianism
about, 482-485
fictions, 488-490
tacit utilitarianism, 508-510
Contracts, utilitarianism: rights,
contract and utility in policy espousal, 477-515
Conventions, science, 268
Cooperation, political economy, 309-311
Coordination
George, 59-62
intertemporal, 145
macroeconomics, 130-134
and subjectivism, 27-30
Costs. See also Opportunity cost
Coase-Buchanan concept of, 42
general equilibrium theory, 7
of government regulation, 342
Courts. See Judicial process
Credit, and money, 144
Credit-allocation, subjectivism, 26
Credit-default swaps, 141
Crowding out, government regulation and, 339-341
Crypticism, subjectivism, 41
Custom unions, trade, 213
Customer service, Klein: how to ensure hotel reservations are honored, 353
D
Darrow, Clarence, determinism as fatalism, 289
Davenport, H.J., monetary of depression, 164
Decentralization, Austrian Economics, 101
Decreasing-cost, general equilibrium theory, 11
Deficit financing, subjectivism, 33
Democracy. See also United States of America
and liberty, 312-314
process, 318
versus constitutional monarchy, 375-387
Democratic markets, Witmann, 367-374
Dependence effect, Galbraith, 300
Descriptive and prescriptive laws, 285
Determinism
about, 283
extreme positions and partial determinism, 299-302
irrefutability of, 297-299
Schlick, 284-286
self-referential problem of, 297
Discrimination argument, redistribution, 469
Disequilibrium
methodology, 230
theories: Hutt, 176-178
Diversion, land and willingness to wait, 211-214
Draft, military draft and subjectivism, 24
Duhem, Pierre, models, 238
Dynamic subjectivism, Lachmann, 45
Dynasties. See Constitutional monarchy
E
Econometrics, methodology, 241-245
Economics
and principles, 349-360
tautologies, 272-274
Economies-of-scale, general equilibrium theory, 11
Efficiency
socialism, 72-92 subjectivism, 27
Egalitarianism, and liberalism, 462-476
Ehrenhalt, Alan, U.S. political system, 361-366
Elasticities, balance-of-payments and exchange rates, 276
Endogeneity, money, 243
Energy crisis of 1974 and 1979, subjectivism and, 22
Energy industry, example of crowding out, 340
Enthoven, Alain, general equilibrium theory equation systems, 15
Entitlements, Kirzner, 408-416 Entrepreneurship
Austrian Economics on, 105
Kirzner: morality of capitalism and profit, 407-421
Equation of exchange, 265-268 Equation systems
equilibrium and socialism, 75-77
general equilibrium theory, 13-16
Equilibrium. See also Disequilibrium; General equilibrium theory
neoclassical economics, 105
simultaneous equations and socialism, 75-77
Ersatz standards, 118-121 Essentialism, about, 283
Ethics, 283-306
chance, 292-295
complexity, 289-292
ethical judgments and determinism: Slote, 287
Kirzner: morality of capitalism and profit, 407-421
Mises: ethics, rights and law, 422-442
political economy, 308
Rothbard and Block: ethics and law, 435-439
Schlick on, 284-286
Euken, Walter, theory, 238
Exchange rates
elasticities, 276
fluctuating, 198
Expectations, subjectivism, 32, 34, 35
Exports, versus imports, 21
External-economy arguments for protection, general equilibrium theory, 12
Extortion, Rothbard: property rights, 433
F
Fallacy-mongering, methodology, 248-350
Fallibilism, authoritarianism, relativism, 486-488
Fatalism, determinism as, 288
Fluctuating exchange rates, 198
Fragmentation
government regulation, 322
policy drift and government regulation, 338
France, alternative histories, 392
Frank, Robert, intersection of economics, psychology and ethics, 237
Free will about, 283
determinism and free will: Schlick, 284-286
ethics, 295-297
Freedom. See also Liberty
Hayek, 397-406
Fry, Maxwell J., land: changes in tastes, taxes or policies, 216
Fundamentalist Keynesianism
about, 128
savings, investment and money, 146
G
Galbraith, J.K., dependence effect, 300
General equilibrium theory, 3-18. See also Equilibrium
about, 3
arguments in favor, 6-9
criticism, 4-6
equation systems, 13-16
fallacies clarified by, 9-13
Mises, 137
Walras’s Law, 265
General Theory (Keynes), 160-163, 167,174
Generic Consistency, Principle of, 480
George, Henry, 51-71
Austrian School of economics, 51-53
independence of, 54
knowledge, coordination and unplanned order, 59-62
methodology, 64-66
social philosophy, 66-69
socialism, 63
value theory, 55-58
Germany, alternative histories, 393
Gerwirth, Alan, Principle of Generic Consistency, 480
Giere, Ronald, models, 239
Glazer, Nathan, judicial activism, 336
Gold standard, 191-208
appeal of, 201-203
arguments pro and con, 192-196
attitudes, 204-206
climates of opinion, 196-198
Hutt, 184
noneconomic motives, 198-201
Government. See also Deficit financing; Policy; Regulation
budget constraints, 273
growth of, 319
Hutt, 178
utilitarian conception of, 502-504
Granger-causality tests, 243
Great Britain, alternative histories, 395
Grinder, Walter, utilitarianism, 491
Grisez, Germain, determinism: self-referential problem of, 297
H
Halmos, Paul, writing style, 256
Hansen, Gary D., business cycle: econometrics, 242
Hardin, Garrett, information glut, 252
Hayek, FA.
business cycle, 149
cooperation and reciprocation, 310
dependence effect: Galbraith, 300
free-market values, 415
money, 143
social justice, 414
on socialism and freedom, 397-406
subjectivism, 28
utilitarianism, 498
Hazlitt, Henry
determinism and free will, 284-286
ethics in Human Action, 445
free will and responsibility, 286-288
natural rights, 482
Health and safety, government regulations, 341
High, Jack, on general equilibrium theory, 4
History. See Narratives
Hobart, R.E., extreme positions and partial determinism, 299
Hobbes, Thomas, government and public policy, 311
Hobbyists, government regulation and, 331
Hoppe, Hans-Hermann, libertarianism and utilitarian ethics, 456
Hotel reservations, Klein: how to ensure hotel reservations are honored, 353
Hotelling-Lerner pricing, socialism, 79
Huerta de Soto, Jésus, on general equilibrium theory, 4
Human Action (Mises), 443-461
Human capital, subjectivism, 25
Hume, David, government and public policy, 311
Hungary, gold standard, 193,195, 196-201
Hutt, William H., 173-190
disequilibrium theories, 176-178
enduring value of message, 187
Keynes: demand theory, 174
Keynes: selling ideas, 186
market processes, 178
micro orientation, 174
money, 180-184
style of argument, 184-186
Hypotheses, competing, 246-248
I
Identification problem, general equilibrium theory, 10
Imports, versus exports, 21
Incentives, for protesting poor
injustices and poor customer service, 354
Income distribution, marginal-productivity theory: George, 57
Incomes, general equilibrium theory, 7
Individualism, government regulation and methodological individualism, 325
Inflation, Allais: allocation effects, 220
Insider information, Kirner, 412
Institutions
Austrian Economics and, 101
macroeconomics, 150
monetary system, 147
prices, 135
social cooperation, 496-499
Interdependence, general equilibrium theory, 6
Interest
capital theory: subjectivism, 36-38
willingness to wait, 212
Interventionism. See also Regulation psychological roots of, 329
Intuitionism
Kirzner and Hayek on, 416
Mises, 458
Investment, macroeconomics, 146-149
Ireland, Peter N., models, 236
J
Jobs, rationing and subjectivism, 25
Judicial process and government regulation, 335-338
Mises: ethics, rights and law, 422-442
Rothbard: axioms, rights and natural law, 430-435
and voluntary economic behavior, 350 Justificationism, Bartley, 235
K
Kant, Immanuel, free will and the laws of nature, 283
Keynes, John Maynard, 157-172
appraisal, 168
crowding out other intellectual developments, 158
Hutt on, 173-190
investment, 149
a Keynesian?, 160-163
lasting appeal, 167
lingering Keynesianism, 164
a monetarist?, 163
overreaction and label-shifting, 165-167
reinterpretation of, 159
the salesman, 157
Keynesianism. See also Fundamentalist Keynesianism; New Keynesian school
about, 128
King, Robert G., attitudes and pressures in macroeconomics, 251
Kings. See Constitutional monarchy Kirzner, Israel, on morality of capitalism and profit, 407-421, 443
Klein, David, how to ensure good customer service, 353
Knight, Frank H., redistribution, 464 Knowledge
calculation, 93-99
George, 59-62
and subjectivism, 27-30
Krugman, Paul, methodology, 232
L
Laband, David, market test of ideas, 116-126
Lachmann, Ludwig, dynamic subjectivism, 45
Land, 209-219
changes in tastes or policies, 214-217
diversion and willingness to wait, 211-214
George: rent, 58
international capital movements, 211
Landesberger, Julius, gold standard, 194
Lange-Taylor solution, socialism, 81
Laws. see Judicial process
Leadership, U.S. political system, 361-366
Leijonhufvud, Axel, Keynes, 159, 177,180
Lerner, Abba P.
money and price stickiness, 136
socialism, 83
Liberalism
attitudes to gold standard, 204
and egalitarianism, 462-476
Libertarians
constitutional monarchy versus democracy, 375-387
Hoppe and utilitarian ethics, 456
utilitarian conception of, 504
Liberty. See also Freedom
coexistence with democracy, 377
and democracy, 312-314
Liquidity preference
Hutt, 176
Keynes, 161
Loan guarantees, general equilibrium theory, 12
Lucas Project, 232
Lucas, Robert E., Jr., models, 231
Lucas supply function, 229
M
Machan, Tibor, utilitarianism, 507
Macroeconomics, 128-156
about, 128-130
appraisal and opportunities, 151-153
attitudes and pressures, 250
capital and interest, 149
coordination, 130-134
credit and money, 144
imperfections of reality, 134-136
institutions, 150
macroeconomic disorder: Hutt, 182
methodology, 229-232
monetary disorder, 142-144
money and price stickiness, 136-138
savings, investment and money, 146-149
time element, 145
Marginal-cost-pricing general equilibrium theory, 11 socialism, 78, 79
Marginal-productivity theory of functional income distribution, George, 57
Market value, for property seized
under eminent domain:
subjectivism, 25
Marketplace of ideas, 116-127
about, 116
Austrian School of Economics, 107-113
influence of Laband-and-Tollison-type thinking 123
methodology, 254
standards and ersatz standards, 118-121
style of argument, 124
truth and games, 117
worries about, 121
Marshall, Alfred, socialism, 78
Materialism, versus subjectivism in policy, 19-27
Mathematical physics, conventions in science, 268
Mathematics
methodology and rigor, 234
tautologies, 272
McCloskey, Donald
clarity versus obscurantism, 255
fallacy-mongering, 248
methodology, 226
models, 236
utilitarianism, 495
Meltzer, Allan, Keynes, 161
Menger, Anton, gold standard, 191, 193,198
Menger, Carl, gold standard, 192, 200
Merit, Hayek, 415
Methodology, 225-262
academic incentives and games, 251-254
attitudes and pressures, 250
Austrian Economics, 102
clarity versus obscurantism, 255-258
competing hypotheses, 246-248
econometrics, 241-245
fallacy-mongering, 248-250
macroeconomics, 229-232
market analogy, 254
models, 235-241
other evidence, 245
preaching and countermethodology, 225-228
rigor, 233-235
Micro orientation, Hutt, 174
Military draft, subjectivism, 24
Mises, Ludwig von
calculation and socialism, 96
calculation debates, 131
economic theory as an “a priori” science, 104,138
ethics, rights and law, 422-442, 443-461
general equilibrium theory, 137
propositions, 240
socialism, 72-74
Models
Lucas, 231
methodology, 235-241
Modigliani, Franco, socialism, 87
Monarchy, constitutional monarchy
versus democracy, 375-387
Monetary system, United States of America, 147
Monetary theory
balance-of-payments, 276
capital and investment, 149
disorder, 142-144
general equilibrium theory, 8
monetary disequilibrium theory, 129,144,163
narrative and statistical history, 139
Money
business cycle: econometrics, 241
capital formation and, 217-222
costs: subjectivism, 44
and credit, 144
econometrics, 242
endogeneity, 243
Hayek, 143
Hutt, 180-184
macroeconomics, 146-149
price stickiness, 136-138
Money prices, general equilibrium theory, 7
Morality. See Ethics
N
Narratives
and statistical history: monetarists, 139
urchronia and alternative history, 388-396
Natural law, 430, 438, 453-457
Natural rights, Rothbard, 477
Natural sciences, tautologies, 270-272
Neoclassical school of economics, Rosen on, 102
New Classical school
about, 129
coordination, 134
New Keynesian school
about, 130
attitudes and pressures, 250
coordination, 134
Nihilism, subjectivism, 45
Nonempiricism, Austrian Economics, 104
Normative and positive propositions, 307
Nozick, Robert entitlements, 408 utilitarianism, 505-507
O
Objective ethics, Rothbard and Mises on, 451
Obscurantism versus clarity, 255-258
Opportunity cost, general equilibrium theory, 8
Optimum conditions, socialism, 74
Overregulation. See Regulation
P
Partial determinism, extreme positions and, 299-302
Partial-equilibrium theory, general equilibrium theory, 11
Pigou effect, 217
Platt, John R., competing hypotheses, 246
Poincaré, Henri
conventions in science, 268
science compared to a library, 269
Policy
government and public policy, 311, 343
landownership, 214-217
policy drift and government regulation, 338
subjectivism, 33-35
utilitarianism: rights, contract and utility in policy espousal, 477-515
Political economy, 307-320. See also Regulation
bureaucracy, 317
cooperation and reciprocation, 309-311
democratic process, 318
ethics, 308
government and public policy, 311, 319
liberty and democracy, 312-314
political process, 316
positive and normative propositions, 307
voting and special interests, 315
Political obligation, utilitarianism, 499-502
Political philosophy. See also Social philosophy
Blanchard: political rights and duties, 501
socialism, 89
Political system. See also United
States of America
politicians and government regulation, 331-335
Wittman: democratic markets, 367-374
Popper, Karl
chance and ethics, 293
on essentialism, 283
ethics and complexity, 292
Population control, 352
Positive and normative propositions, 307
Preaching and methodology, 225-228
Predictions, Austrian Economics on, 105
Prescott, Edward C., business cycle: econometrics, 242
Prescriptive and descriptive laws, 285
Prices. See also Money prices calculation, 94
Hayek on free-market values, 415
Hutt, 178
institutions, 135
Kirzner and Nozick on, 412
Mises, 135
prices system and subjectivism, 31
stickiness, 136-138
subjectivism, 28
Principle of complementarity, Bohr, 275
Principle of Generic Consistency, Gerwirth, 480
Principles, economics and, 349-360
Priorities, subjectivism, 22
Process, Austrian School of Economics attention to, 137
Productivity, George, 55-58
Profit, Kirzner: morality of capitalism and profit, 407-421
Property, subjectivism and market value when seized under eminent domain, 25
Property rights
crowding out and government regulation, 340
George, 68
Rothbard: axiomatic approach, 431-435 subjectivism, 35
Propositions
Mises, 240
positive and normative propositions, 307
Protection, general equilibrium
theory, 12
Prowse, Michael, constitutional monarchy, 383
Publication of articles
Austrian School of Economics, 107
market test of ideas, 121
Purchasing-power argument, general equilibrium theory, 11
R
Rand, Ayn, market test of ideas,IIO Randomness, ethics, 292-295
Rational expectations
Hutt, 183
methodology, 229
Rational ignorance, 376
Rawls, John, utilitarianism, 491, 493, 508-510
Real-balance effect, 217
Real-bills doctrine, general equilibrium theory, 12
Real-business-cycle school, 129
Real disturbances, 139 Recoordination, 133
Redistribution
discrimination argument, 469
egalitarianism and liberalism, 463
Regulation, 321-348
bureaucracy and, 335
costs, 342
courts’ role in, 335-338
crowding out, 339-341
flaw in political system, 323-325
fragmented decisions and agglomerated activities, 322
hobbyists and, 331
methodological individualism, 325
policy drift, 338
policy implications, 343
politicians, 331-335
special interests and synthetic majorities, 329
voters, 326-329
Relative poverty, 466
Relativism, fallibilism, authoritarianism, 486-488
Rights
Mises: ethics, rights and law, 422-442
Rothbard: axioms, 430-435
Rothbard: natural law and natural rights, 453
utilitarianism: rights, contract and utility in policy espousal, 477-515
value judgments, 478
The Road to Serfdom (Hayek), 397, 401-406
Robbins, Lionel, socialism, 75
Rockoff, Hugh, gold standard, 202
Rosen, Sherwin, Austrian Economics, 100-112
Rothbard, Murray
axioms about rights, 430-435
Hoppe and anarcho-Lockean rights, 457
landownership, 209
Mises and objective ethics, 451
Mises and utilitarianism, 427-430, 452
morality and law, 435-439
natural law and natural rights, 453-455, 477
on subjectivism, 38
Russia, gold standard, 194,197, 200
S
Salerno, Joseph T.
calculation, 93
prices and calculation, 94
Samuelson, Paul, tautologies, 273
Sargent, Thomas, on general equilibrium theory, 5
Savings
land and willingness to wait, 214
macroeconomics, 146-149
real capital formation, 218
saving preference: Hutt, 176
Say’s Law, Hutt on, 175
Scarcity
applied to methodology, 256
Sowell: politics and economics of scarcity, 315
Schlick, Moritz
determinism and free will, 284-286
extreme positions and partial determinism, 301
Schmidtz, David, entitlements, 409
Schoeck, Helmut, incentives for protesting poor injustices and poor customer service, 354
Schumpeter, Joseph
George, 69
liberty and democracy, 313
Science, conventions in, 268
Scientism, subjectivism, 24
Scott, Anthony, land: changes in tastes, taxes or policies, 216
Secondary effects, general equilibrium theory, 12
Secondhandism, 124
Separation of powers, 378
Shock effect, general equilibrium theory, 11
Simultaneous equations. See Equation systems
Slote, Michael, ethical judgments and determinism, 287
Slumps. See Business cycle
Social contract, Buchanan, 488-490
Social cooperation
about, 417
comparative institutions, 496-499
market test of ideas, 116
Social justice, Hayek, 414
Social philosophy. See also Political philosophy
George, 66-69
socialism, 89
Socialism
calculation, 96
efficiency, 72-92
George, 63
Hayek, 397-406
subjectivism, 34
Sowell, Thomas, politics and economics of scarcity, 315
Special interests, and government regulation, 329
Standards and ersatz standards,
Subjectivism, 19-50
about, 19
capital and interest theory, 36-38
concluding thoughts, 46
degrees of, 38-46
economic theory, 30-33
George, 55-58
knowledge and coordination, 27-30
materialism versus subjectivism in policy, 19-27 policy, 33-35
Subsidies, general equilibrium theory, 11
T
Tariffs, general equilibrium theory, 12
Tastes, landownership, 214-217
Tautologies, 263-279
about, 263-265
balance-of-payments, 274-277
conventions in science, 268
economics, 272-274
examples in the natural sciences, 270-272
Walras’s Law, 265-268
Taxation
land, 215
link to expenditures, 324
tax cuts and budget limits, 343
Theory, Euken, 238
Thrift, landownership, 210
Time
Austrian Economics and, 101
George, 55-58
macroeconomics, 145
Tollefsen, Olaf, determinism: self-referential problem of, 297
Tollison, Robert, market test of ideas, 116-126
Trade, custom unions, 213
Trade interventions, general equilibrium theory, 12
Truth. See Marketplace of ideas Truth judgment, Buchanan, 485
U
Uchronia, 388-396
Ultrasubjectivists, 39
United States of America
alternative histories, 392
democratic process, 314, 361-366
monetary system, 147
political process, 316
Unplanned order, George, 59-62
Utilitarianism
political obligation, 499-502
rights, contract and utility in policy espousal, 477-515
Rothbard and natural rights, 439
V
Value judgments
rights, 478
and value-free propositions: Austrian Economics, 102
Value theory
George, 55-58
Hayek, 415
Vandberg, Viktor, contractarianism, 484
VAR technique, 243
Vaughn, Karen
contractarianism, 484
Mises and utilitarianism, 426
Vickrey, William, multi-part pricing and socialism, 80
Voluntary compliance, 352
Voting
and special interests, 315
vote-trading process, 330
voters and government regulation, 326-329
Winston Churchill on voters and democracy, 376
W
Waiting, land and the willingness to wait, 211-214
Walras’s Law, 263, 265-268, 275
Warburton, Clark, Keynes, 158
Wealth effect, 217
Welfare properties, subjectivism, 34
Williamson, Steve, models, 237
Winks, Robin, historical evidence, 246
Wittmann, Donald, democratic markets, 367-374
Workers’ sovereignty, subjectivism, 29
World War I and II, alternative histories, 393
Wright, Randall, models, 237
Writing style, Halmos, 256
Is the Market a Test of Truth and Beauty?: Essays in Political Economy
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